The Management of Plotnik Corporation Is Investigating Purchasing Equipment That

question 231

Multiple Choice

The management of Plotnik Corporation is investigating purchasing equipment that would increase sales revenues by $269,000 per year and cash operating expenses by $156,000 per year. The equipment would cost $294,000 and have a 6 year life with no salvage value. The simple rate of return on the investment is closest to (Ignore income taxes.) :

• A) 16.7%
• B) 38.4%
• C) 23.8%
• D) 21.8%

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Definitions:

Real Estate Partnership

A type of business arrangement in which partners join together to buy, sell, manage, or invest in real estate properties.

RUPA

The Revised Uniform Partnership Act, which governs the operation of partnerships in the jurisdictions that have adopted it.

Disproportionate

Lacking symmetry, balance, or proportion; notably unequal or uneven in distribution or adjustment.

Partnership Agreement

A legal document that outlines the rights, responsibilities, and obligations of each partner in a business partnership.