The Management of Opray Corporation Is Considering the Purchase of a Machine

question 285

Multiple Choice

The management of Opray Corporation is considering the purchase of a machine that would cost $360,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $78,000 per year. The company requires a minimum pretax return of 11% on all investment projects. (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 present value of the annual cost savings of $78,000 is closest to:

• A) $763,064
• B) $177,027
• C) $546,000
• D) $367,536

---

Definitions:

Identical Twins

Identical twins are two siblings born at the same time, developed from one zygote that splits and forms two embryos, sharing exactly the same genetic materials.

Schizophrenic Disorders

A group of severe mental disorders characterized by disordered thoughts, perceptions, and emotions, manifesting as hallucinations, delusions, and impaired functioning.

Positive

Characterized by the presence rather than the absence of distinguishing features, often indicating approval or good outcomes.

Negative Symptoms

In psychiatry, these refer to the absence or reduction of normal emotions or behaviors, often seen in conditions like schizophrenia.