A Company Projects an Increase in Net Income of $40,000

question 75

Multiple Choice

A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment.The equipment has a five-year life and an estimated salvage value of $50,000.The company uses the straight-line method of depreciation.What is the annual rate of return?

• A)8%
• B)14.5%
• C)18%
• D)26.7%

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Definitions:

Obsession

Persistent, intrusive, and unwanted thoughts that cause significant anxiety or distress.

Ritualistic Behavior

Repetitive actions performed in a prescribed manner, often part of religious, cultural, or social practices, imbued with symbolic meaning.

Impulse

A sudden, involuntary urge to do something.

Delusion

A false belief held with strong conviction despite superior evidence to the contrary, often a symptom of psychiatric disorders.