A Company Buys a Color Printer That Will Cost $18,000

question 71

Multiple Choice

A company buys a color printer that will cost $18,000 to buy, and last 5 years. It is assumed that it will require servicing costing $500 each year. What is the equivalent annual annuity of this deal, given a cost of capital of 12%?

• A) -$4002
• B) -$5493
• C) -$3983
• D) -$4957

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Definitions:

Protective Tariffs

Taxes imposed on imported goods to protect domestic industries from foreign competition by making the imported goods more expensive.

Domestic Producers

Manufacturers or providers of goods and services within a country's own borders, as opposed to foreign producers.

Equilibrium World Price

The price at which the quantity of a good demanded globally equals the quantity supplied across the world, without any trade barriers.

Domestic Quantity Supplied

the total amount of a good or service that producers in a domestic market are willing and able to supply at a given price level.