The Following Present Value Factors Are Provided for Use in This

question 121

Multiple Choice

The following present value factors are provided for use in this problem.
-Xavier Co.wants to purchase a machine for $37,000 with a four year life and a $1,000 salvage value.Xavier requires an 8% return on investment.The expected year-end net cash flows are $12,000 in each of the four years.What is the machine's net present value?

• A)$3,480.
• B)$2,745.
• C)$40,480.
• D)($3,480).
• E)($2,745).

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Definitions:

International Financial Reporting Standards

A set of accounting standards developed by the International Accounting Standards Board that provides globally consistent financial reporting norms.

Inventory Write-Downs

An accounting process of reducing the cost of inventory that has declined in value below its original cost.

Net Profit Margin Ratio

A profitability measure that calculates the percentage of net income derived from total revenues.

Operating Expenses

Operating expenses encompass the costs associated with running the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and payroll.