Use the Following Information for Questions 106-108 $\text { Present Value of an Annuity of } 1$

question 119

Multiple Choice

Use the following information for questions 106-108.
Cleaners, Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $14,600 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. $\text { Present Value of an Annuity of } 1$
$\begin{array}{ll}\text { Periods } &8\%& 9 \% & 10 \% & 11 \%& 12 \%&15\%\\5&4.623&4.486&4.355&4.231&4.111&3.784\end{array}$

-What is the approximate net present value of this investment?

• A) $27,600
• B) $3,583
• C) $1,772
• D) $5,496

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Definitions:

Performance Measurements

Performance measurements are quantitative tools used to evaluate the efficiency and effectiveness of an action or a series of actions within an organization.

Work In Process Inventory

An accounting category representing goods that are partially completed in manufacturing but not yet ready for sale.

Total Manufacturing Costs

The sum of all costs involved in the production of goods, including raw materials, direct labor, and overhead expenses, crucial for determining product pricing.

Cost Of Goods Manufactured

The total production cost (including materials, labor, and overhead) of goods that were completed during a specific accounting period.