$$\text { Reference: } 10 - 08$$ Westland College Has a Telephone System That Is in Poor

question 42

Multiple Choice

$$\text { Reference: } 10 - 08$$ Westland College has a telephone system that is in poor condition. The system either can be overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives: $$\begin{array} { | l | l | c | } \hline & \begin{array} { l } \text { Present } \\\text { System }\end{array} & \begin{array} { l } \text { Proposed New } \\\text { System }\end{array} \\\hline \text { Purchase cost new } & \$ 250,000 & \$ 300,000 \\\hline \text { Accumulated depreciation } & \$ 240,000 & - \\\hline \text { Overhaul costs needed now } & \$ 230,000 & - \\\hline \text { Annual cash operating costs } & \$ 180,000 & \$ 170,000 \\\hline \text { Salvage value now } & \$ 160,000 & - \\\hline \text { Salvage value at the end of 8 years } & \$ 152,000 & \$ 165,000 \\\hline \text { Working capital required } & - & \$ 200,000 \\\hline\end{array}$$ Westland College uses a 10% discount rate and the total cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years. The working capital required will be released in full at the end of the 8 years to be available for other purposes.
- $$\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Cash Flow Over } \\\text { Life of Project }\end{array} & \begin{array} { l } \text { Time Value of } \\\text { Money }\end{array} \\\hline \text { A) } & \text { No } & \text { Yes } \\\hline \text { B) } & \text { No } & \text { No } \\\hline \text { C) } & \text { Yes } & \text { No } \\\hline \text { D) } & \text { Yes } & \text { Yes } \\\hline\end{array}$$

• A)choice A.
• B)choice B.
• C)choice C.
• D)choice D.

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Definitions:

Fugue State

A rare dissociative disorder characterized by reversible amnesia for personal identity, including the memories, personality, and other identifying characteristics of individuality.

Anxiety

A state of distress or anxiety, especially in anticipation of something that is about to happen or because the result is not clear.

Negative Symptom

A term often used in psychology and psychiatry to describe a lack or diminution of normal functions, such as reduced emotion or motivation.

Schizophrenia

A chronic brain disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.