Turntec Is Considering Replacing an Automatic Shuttle Machine That Has

question 3

Multiple Choice

Turntec is considering replacing an automatic shuttle machine that has a book value of $2,000 and a $0 market value with a more efficient machine that will cost $24,000.The annual net cash flows from the new equipment are expected to be $6,000 for the next 6 years.What is the net present value of this project? Assume the firm's cost of capital is 12 percent and its marginal tax rate is 40 percent.

• A)$666
• B)$1,466
• C)$1,866
• D)-$134

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Definitions:

HOMO

The Highest Occupied Molecular Orbital, referring to the molecular orbital that contains the highest energy electrons in a molecule.

LUMO

Lowest Unoccupied Molecular Orbital, the lowest energy orbital that can accept an electron.

Hybridization

A concept in chemistry that describes the mixing of atomic orbitals to form new hybrid orbitals that can accommodate the pairing of electrons to form bonds.

Central Carbon

The carbon atom in an organic molecule that is bonded to four different groups, making it a chiral or stereo center.