Cortland Corp

question 121

Multiple Choice

Cortland Corp.is considering the purchase of a new piece of equipment.The cost savings from the equipment would result in an annual increase in net cash flows of $100,000.The equipment will have an initial cost of $400,000 and have a 5-year life.If the salvage value of the equipment is estimated to be $75,000,what is the annual net income? Ignore income taxes.

• A)$25,000
• B)$35,000
• C)$165,000
• D)$175,000

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Definitions:

Preferences

Individual tendencies or choices toward certain options over others, often based on values, beliefs, or personal tastes.

Z Problem-Solving Model

A decision-making framework that alternates between analytical and intuitive thinking strategies.

Nonpreferences

Choices or options that are less desirable or not preferred by an individual or group when making decisions.

Individual Development

The continuous process of personality, skill, and capacity enhancement over one's lifespan.