Johnson Jets Is Considering Two Mutually Exclusive Machines

question 38

Multiple Choice

Johnson Jets is considering two mutually exclusive machines. Machine A has an up-front cost of $100,000 (CF0 = -100,000) Machine B has an up-front cost of $50,000(CF0 = -50,000) The company's cost of capital is 10.5 percent. What is the net present value (on a six-year extended basis) of the most profitable machine?

• A) $23,950
• B) $41,656
• C) $56,238
• D) $62,456
• E) $71,687

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Definitions:

Monocotyledon

A group of flowering plants whose seeds typically contain one embryonic leaf, or cotyledon.

Eudicotyledon

A major group of flowering plants characterized by the presence of two seed leaves, or cotyledons, upon germination.

Vascular Bundles

Strands of specialized tissue in plants that contain xylem and phloem for the transportation of water, nutrients, and sugars.

Apical Meristem

A region of plant tissue, found at the tips of roots and shoots, responsible for primary growth.