A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm’s current fixed costs are $9,000 and current marginal cost are $15. The firm currently charges $18 per unit. If the cost of capital is 5% then the net present value of the investment is a. $10,000 b. -$7,380.95 c. $7,380.95 d. $6,020.41