A Company Is Considering the Purchase of a New Machine

question 55

True/False

A company is considering the purchase of a new machine for $48,000. Management expects that the machine can produce sales of $16,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $8,000 per year plus depreciation of $4,000 per year. All revenues and expenses except depreciation are on a cash basis. The payback period for the machine is 12 years.

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Definitions:

Detail Oriented

The characteristic of being meticulous and precise, paying close attention to the fine points and specifics.

Conventional

Adhering to accepted standards, norms, or practices; not unusual, radical, or unconventional.

Professional Experience

Work-related knowledge and skill acquired through actual performance in professional roles.

Internship

A temporary position with an emphasis on on-the-job training rather than merely employment, often integral for gaining practical experience in one's field.