The Management of Wyoming Corporation Is Considering the Purchase of a New

question 58

Multiple Choice

The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: The average rate of return for this investment is

• A) 5%
• B) 10%
• C) 25%
• D) 15%

---

Definitions:

A/C Circuit

An alternating current (A/C) circuit, in which the flow of electric charge periodically reverses direction, typically used in household and industrial power.

Condenser

In automotive contexts, a heat exchanger component in the air conditioning system that cools and condenses refrigerant gas back into a liquid.

Retrofitting

The process of adding new technology or features to an existing system, machine, or building to improve its functionality or performance.