Dexter Company Is Considering Purchasing Equipment

question 3

Multiple Choice

Dexter Company is considering purchasing equipment. The equipment will produce the following cash flows:
Year 1 $120,000
Year 2 $200,000
Dexter requires a minimum rate of return of 10%. What is the maximum price Dexter should pay for this equipment?

• A) $274,381
• B) $165,290
• C) $320,000
• D) $160,000

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Definitions:

Reverse Transcriptase

An enzyme used by certain viruses to transcribe their RNA into DNA, enabling them to integrate into the host genome.

Flow of Energy

Describes the transfer of energy through a food chain or ecosystem, from producers through consumers and finally to decomposers.

Intestinal Bacteria

Microorganisms residing in the gastrointestinal tract, playing critical roles in digestion, immunity, and overall health.

Mutualism

A type of ecological interaction where both species involved benefit from their relationship.