On January 2, 2010, Bork Corp

question 59

Multiple Choice

On January 2, 2010, Bork Corp.replaced its boiler with a more efficient one.The following information was available on that date: The old boiler was sold for $3,000.What amount should Ross capitalize as the cost of the new boiler?

• A)$98,000.
• B)$92,000.
• C)$95,000.
• D)$97,000.

---

Definitions:

Annuities

Financial products sold by financial institutions designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time, typically during retirement.

Cash Flows

The aggregate of cash inflows and outflows within a corporation, impacting its liquid assets.

Ordinary Annuity

A series of equal payments made at equal intervals over a period of time.

Compounding Periods

The frequency with which interest is added to the principal balance of an investment, affecting the total interest earned.