Berry Inc Has 6 Computers Which Have Been Part of the the Inventory

question 157

Multiple Choice

Berry Inc. has 6 computers which have been part of the inventory for over two years. Each computer cost $600 and originally retailed for $900. At the statement date each computer has a current replacement cost of $450. What value should Berry Inc. have for the computers at the end of the year?

• A) $1800.
• B) $2700.
• C) $3600.
• D) $5400.

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Definitions:

Face Value

The nominal value or dollar value stated on a security or financial instrument, such as a bond.

Investment Yield

The income returned on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.

Maturity Date

The specified date when the principal amount of a loan, bond, or other financial instrument is due to be paid in full.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.