A New Pinball Machine Will Generate $3,000 in Additional Revenue

question 15

Multiple Choice

A new pinball machine will generate $3,000 in additional revenue each year for a game arcade.It has a useful life of three years.Assume that each year's income is received at the end of the year.If the interest rate is 10 percent (0.10) per year,,what is the present value of a new pinball machine to the arcade?

• A)$6,761.83
• B)$8,181.82
• C)$9,000.00
• D)$7,460.56
• E)$8,206.61

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Definitions:

Chattel Paper

A document or records indicating both a monetary obligation and a security interest in or lease of specific goods.

Collateral

Assets or property offered as security for a loan, to be forfeited in the event of default.

Perfected Purchase

A legal status in property law where the buyer obtains the rights to the property free from any prior claims or liens.

Money Security Interest

A legal claim or lien on collateral (such as cash or deposit accounts) provided by a debtor to secure a loan or other credit, ensuring the lender has a priority claim over the funds in the case of default.