Wilson Corp

question 14

Multiple Choice

Wilson 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 income after tax of $50,000.The equipment will have an initial cost of $600,000 and have an 8-year life.The salvage value of the equipment is estimated to be $100,000.If the hurdle rate is 10%,what is the approximate net present value? (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuity of $1. ) (Use appropriate factor from the PV tables.Round your final answer to the nearest dollar amount. )

• A)Less than zero
• B)$100,000
• C)$500,000
• D)$46,826

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention; in classical conditioning, it becomes associated with an unconditioned stimulus.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, emphasizing the effects of consequences on behavior.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, elicits a conditioned response.