The management of Douglass Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation:


Year Income from operations Net cash flow
1 $18,750 $93,750
2 $18,750 $93,750
3 $18,750 $93,750
4 $18,750 $93,750