A Firm Decides to Purchase a 3D Printer at a Cost

question 94

Multiple Choice

A firm decides to purchase a 3D printer at a cost of $25,000,with an estimated useful life of 10 years.The printer will require servicing at a cost of $1,500 per year.What is the equivalent annual annuity of this deal,given a cost of capital of 8%?

• A)$5,226
• B)$4,000
• C)$3,704
• D)$1,500
• E)$35,065

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Definitions:

Public Share

Equity in a company that is available for trading by the general public on a stock exchange.

Securities Commission

A provincial agency that serves as a watchdog for the stock market.

Provincial Agency

A government entity or organization established at the provincial level to perform a specific function or provide a specific service.

Closely Held Corporation

A type of corporation that is privately owned, with a small number of shareholders, typically involving family or close acquaintances.