Use the Following to Answer Questions

question 76

Multiple Choice

Use the following to answer questions
Forecaster Industries is considering the purchase of a new machine that will cost the company $65,750. The machine is estimated to have a 5 year life and no salvage value. The machine is expected to generate $23,000 of cash inflows each year over the life of the asset. Forecaster's cost of capital is 12%.
-Ignoring income taxes,Forecaster should:

• A)not purchase the machine since the net-present-value is negative
• B)not purchase the machine since the net-present-value is positive
• C)purchase the machine since the net-present-value is negative
• D)purchase the machine since the net-present-value is positive

Recognize the role of vertical integration in preventing arbitrage and maintaining price discrimination.

Understand the implications of minimum wage regulations on employer practices.

Assess strategies employed by companies to circumvent price and rent controls.

Appreciate the significance of signals in vertical contracts concerning product success expectations.

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Definitions:

Umbilical Cord

A life-support system that contains two arteries and one vein and connects the baby to the placenta.

Single Vein

Refers to a singular blood vessel that carries blood towards the heart, often used in botanical or anatomical contexts.

Two Arteries

Refers to the presence of two major arteries, typically in context of human anatomy, biology, or when discussing vascular systems in general.

Fertilization

A stage in reproduction during which an egg and a sperm fuse to create a single cell, called a zygote.