Morrel University Has a Small Shuttle Bus That Is in Poor

question 320

Multiple Choice

Morrel University has a small shuttle bus that is in poor mechanical condition. The bus can be either overhauled now or replaced with a new shuttle bus. The following data have been gathered concerning these two alternatives (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.The University could continue to use the present bus for the next seven years. Whether the present bus is used or a new bus is purchased, the bus would be traded in for another bus at the end of seven years. The University uses a discount rate of 12% and the total cost approach to net present value analysis.If the present bus is repaired, the present value of the salvage received on sale of the bus seven years from now is closest to:

• A) $(2,260)
• B) $2,260
• C) $904
• D) $(904)

---

Definitions:

Preconventionally

Refers to the first level of Kohlberg's theory of moral development, where individuals' moral reasoning is based on personal punishments and rewards.

Securely Attached Infants

Infants who exhibit strong emotional and physical attachment to caregivers, responding positively to their presence and showing distress when they are absent, signaling a healthy attachment bond.

Adjustment

A psychological process of adapting or coping with new, challenging, or changing circumstances or environments.

Schizophrenia

A chronic mental illness that disrupts the normal relationship among thinking, emotion, and action, causing incorrect beliefs, unfitting reactions and sentiments, isolation from the real world and personal connections into make-believe and false beliefs, with an experience of psychological disintegration.