Reference: 10-03
Apex Corp -Benz Company Is Considering the Purchase of a Machine That

question 11

Multiple Choice

Reference: 10-03
Apex Corp. is planning to buy production machinery costing $100,000. This machinery's expected useful life is five years, with no residual value. Apex uses a discount rate of 10% and has calculated the following data pertaining to the purchase and operation of this machinery: $$\begin{array} { | c | c | } \hline \text { Year } & { \begin{array} { c } \text { Estimated } \\\text { annual net } \\\text { cash inflow }\end{array} } \\\hline 1 & \$ 60,000 \\\hline 2 & 30,000 \\\hline 3 & 20,000 \\\hline 4 & 20,000 \\\hline 5 & 20,000 \\\hline\end{array}$$
-Benz Company is considering the purchase of a machine that costs $100,000 and has a useful life of 18 years with no salvage value.:

• A)$14,600.
• B)$13,760.
• C)$42,413.
• D)it is impossible to determine from the data given.

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Definitions:

Linea Alba

A fibrous structure that runs down the midline of the abdomen, forming the seam of the abdominal muscles, and serves as an important site for muscle attachment.

Rectus Abdominis

A major muscle in the abdomen, known as the "six pack," responsible for flexing the lumbar spine and stabilizing the pelvic and lower back region.

External Oblique

A muscle located on the lateral and anterior parts of the abdomen, involved in trunk rotation and lateral flexion of the spine.

Orbicularis Oculi

A circular muscle around the eye socket that allows for blinking, winking, and squinting.