Live Nutrition Is Considering the Purchase of a New Computer

question 37

Multiple Choice

Live Nutrition is considering the purchase of a new computer system for diagnosing health problems.The company estimates that the system will result in increased operating cash flows of $5,800 in year 1, $6,500 in year 2, and $11,400 in year 3.The company's required rate of return is 8%.What is the maximum cost the company will be willing to pay for the computer system?

• A)$14,947
• B)$23,700
• C)$19,992
• D)$43,692

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Definitions:

Revenue Streams

Different sources or methods through which a business generates income from its activities or assets.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage.

Sales Forecasts

Projections about future sales volumes based on analyses of market trends, historical sales data, and economic factors.

Industry-Wide Trends

General directions or patterns of change affecting an entire industry, including technologies, consumer behaviors, and regulatory environments.