A Company Buys 10 New Computers Every Year for $1

question 25

Multiple Choice

A company buys 10 new computers every year for $1 200 each. They depreciate at 30% per year. After two years they are sold for their UCC value. The half-year rule applies. If the company pays taxes at 40% and has an after-tax MARR of 20%, what is the net present cost of buying and subsequently selling each computer?

• A)$289
• B)$393
• C)$412
• D)$478
• E)$521

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Definitions:

Wool Sweater

A clothing item knitted from wool yarn, known for its warmth and moisture-wicking properties.

Magnetomotive Force

The force that drives magnetic flux through a magnetic circuit, analogous to electromotive force in an electrical circuit.

Ampere-Turns

A unit of magnetomotive force in an electromagnetic coil, calculated by multiplying the current (in amperes) by the number of turns in the coil.

Current Path

The path or route that electric current follows through a circuit or an electrical device.