Miles, Inc A)$23,958 Per Year

question 123

Multiple Choice

Miles, Inc.is considering the purchase of a new machine for $600,000 that has an estimated useful life of 5 years and no salvage value.The machine will generate net annual cash flows of $105,000.It is believed that the new machine will reduce downtime because of its reliability.Assume the discount rate is 8%.In order to make the project acceptable, the reduction in downtime must be worth $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 8 \% & \text { of } 1 \text { at } 8 \%\\1 & .926 & .926 \\2 & .857 & 1.783 \\3 & .794 & 2.577 \\4 & .735 & 3.312 \\5 & .681 & 3.993\end{array}$

• A)$23,958 per year.
• B)$49,662 per year.
• C)$18,264 per year.
• D)$45,263 per year.

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Definitions:

Muscle Contractions

The process by which muscle fibers produce force and shorten, resulting in movement or maintenance of posture.

Eversion

The movement of turning a body part outward, such as rotating the sole of the foot away from the midline of the body.

Inversion

Turning the sole of the foot medially.

Musculoskeletal System

The organ system that includes bones, muscles, cartilage, tendons, ligaments, and joints supporting movement and form of the body.