Fletcher Corp

question 51

Multiple Choice

Fletcher Corp.is considering the purchase of a new piece of equipment.The equipment will have an initial cost of $400,000,a 5-year life,and a salvage value of $75,000.If the accounting rate of return for the project is 10%,what is the annual increase in net cash flow? Ignore income taxes.

• A)$25,000
• B)$40,000
• C)$65,000
• D)$105,000

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Definitions:

Price Level

A median calculation of the present prices for a broad range of goods and services in the economy.

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A situation in which the value of the Mexican Peso decreases relative to other currencies.