Dowlen, Incorporated, Is Considering the Purchase of a Machine That

question 33

Multiple Choice

Dowlen, Incorporated, is considering the purchase of a machine that would cost $150,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $36,000 per year. Additional working capital of $6,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to (Ignore income taxes.) :Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.

• A) $9,657
• B) $(2,004)
• C) $6,699
• D) $13,223

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Definitions:

Psychodynamic Therapy

A therapeutic approach based on psychoanalytic principles, focusing on unconscious processes and childhood experiences in shaping behaviors and emotions.

Self-acceptance

The recognition and acceptance of one's self, including both strengths and weaknesses, without undue self-criticism.

Therapeutic Alliance

A bond of trust and mutual understanding between a therapist and client, who work together constructively to overcome the client’s problem.

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The degree to which something is successful in producing a desired or intended result, often used to evaluate methods, interventions, or outcomes.