Vextra Corporation Is Considering the Purchase of New Equipment Costing

question 54

Multiple Choice

Vextra Corporation is considering the purchase of new equipment costing $35,000.The projected annual cash inflow is $11,000,to be received at the end of each year.The machine has a useful life of 4 years and no salvage value.Vextra requires a 12% return on its investments.The present value of an annuity of $1 for different periods follows:
-What is the net present value of the machine?

• A)$(33,410).
• B)$(3,100).
• C)$35,000.
• D)$3,410.
• E)$(1,590).

Grasp the principles of planning and writing for an effective and collaborative wiki.

Identify ethical considerations in creating and using business visuals.

Understand the concept of visual literacy and its importance in business communication.

Comprehend the advantages of incorporating visual images into business documents.

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Definitions:

Plant and Equipment

Plant and equipment are tangible assets used in the production or supply of goods and services, such as machinery, vehicles, and buildings, necessary for business operations.

Accumulated Depreciation

Sum of all depreciation expenses allocated to a fixed asset since it first became operational.

Mortgage Payable

A liability account showing amount owed on a mortgage.

Liquidity

A measure of the ease with which an asset can be converted into cash without significant loss in value.