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:

Dissolved Phosphorus

Phosphorus that is in a soluble form in water, available to organisms for uptake and essential for biological processes such as energy transfer.

Decomposition

The process by which organic substances are broken down into simpler organic or inorganic matter, primarily by microbial action.

Trophic Level

The position an organism occupies in a food chain, based on its feeding habits.

Tertiary Consumers

Organisms that occupy the top level in a food chain by feeding on secondary consumers; they are typically predators.