A Machine Costs $25,000; It Is Expected to Generate Annual

question 95

Multiple Choice

A machine costs $25,000; it is expected to generate annual cash revenues of $8,000 and annual cash expenses of $2,000 for five years. The required rate of return is 12%.

The net present value of the machine is:

• A) $(3,840).
• B) $(3,370).
• C) $0.
• D) $21,630.
• E) $28,840.

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Definitions:

Business Suit

A set of garments, typically including a jacket and trousers or a skirt, worn in professional settings.

Patterned Hose

Hosiery that has decorative designs, such as stripes, dots, or other motifs, woven into or printed on the fabric.

Nervous Mannerism

Behaviors or actions displayed by individuals when they are anxious or stressed.

Verbal Spacers

Filler sounds or words, such as "um," "like," or "you know," used by speakers during conversation to pause for thought without breaking the flow of speech.