A Company Can Buy a Machine That Is Expected to Have

question 50

Multiple Choice

A company can buy a machine that is expected to have a three-year life and a $30,000 salvage value. The machine will cost $1,800,000 and is expected to produce a $200,000 after-tax net income to be received at the end of each year. If a table of present values of 1 at 12% shows values of 0.8929 for one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the cash flows from the investment, discounted at 12%?

• A) $118,855
• B) $583,676
• C) $629,788
• D) $705,391
• E) $1,918,855

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Definitions:

Unified Purpose

A shared or collective intention among a group or individual, driving toward a common goal or outcome.

Identity

The understanding or concept of oneself, including personal values, beliefs, and characteristics, forming an individual's self-perception.

Dispositional Traits

Enduring characteristics or tendencies that influence an individual's attitudes and behaviors across different situations and over time.

Age 30

A reference to the age which is often considered a milestone in adulthood, associated with reflecting on personal development and future goals.