Morrel University Has a Small Shuttle Bus That Is in Poor

question 10

Multiple Choice

Morrel University has a small shuttle bus that is in poor mechanical condition. The bus can be either overhauled now or replaced with a new shuttle bus. The following data have been gathered concerning these two alternatives (Ignore income taxes.) : Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided.
The University could continue to use the present bus for the next seven years. Whether the present bus is used or a new bus is purchased, the bus would be traded in for another bus at the end of seven years. The University uses a discount rate of 12% and the total cost approach to net present value analysis.
If the new bus is purchased, the present value of the annual cash operating costs associated with this alternative is closest to:

• A) $(54,800)
• B) $(36,500)
• C) $(16,200)
• D) $(42,800)

---

Definitions:

SQL

Structured Query Language, a standardized programming language used for managing and manipulating relational databases.

Query Window

A UI element in database software where users can type and execute SQL queries to retrieve or manipulate data.

Open

The action or process of making something accessible or available for use.

Design View

A mode in software applications that allows the user to edit or layout the document or database visually.