A New File Cabinet Will Generate $300 in Net Revenue

question 66

Multiple Choice

A new file cabinet will generate $300 in net revenue each year for a Data Storage Co.The file cabinet has a useful life of two years.At the end of the second year,the cabinet will be sold as scrap metal for $200.If the interest rate is 10 percent (0.10) per year,what is the present value of the file cabinet to Data Storage Co.? (Assume that each year's revenue is received at the end of the year. )

• A)$500
• B)$600
• C)$800
• D)$1,000
• E)none of the above

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