Almendarez Corporation Is Considering the Purchase of a Machine That

question 351

Multiple Choice

Almendarez Corporation is considering the purchase of a machine that would cost $320,000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $51,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $72,000. The company requires a minimum pretax return of 18% 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 net present value of the proposed project is closest to:

• A) $(29,522)
• B) $(45,536)
• C) $5,464
• D) $(94,042)

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Definitions:

First-Cousin Marriage

A type of marriage where the spouses are first cousins, sharing grandparents or having two of their four grandparents in common.

Myth

An old narrative, particularly one that deals with the origins of a nation or elucidates a phenomenon of nature or society, and commonly includes supernatural characters or happenings.

Birth Defects

Anomalies that are present at birth and can result in physical, intellectual, or developmental disabilities, varying widely in severity.

Polygyny

A marriage form in which a man is married to two or more women at the same time; a form of polygamy.