Monterey Corporation Is Considering the Purchase of a Machine Costing

question 55

Multiple Choice

Monterey Corporation is considering the purchase of a machine costing $36,000 with a 6-year useful life and no salvage value. Monterey uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Monterey's average investment?

• A) $6,000.
• B) $7,000.
• C) $18,000.
• D) $21,000.
• E) $36,000.

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Definitions:

Implicit Memory

A type of long-term memory that does not require conscious thought to recall information, such as procedural memory for tasks.

Nondeclarative Memory

A type of long-term memory that doesn't require conscious thought and includes procedural memory, such as how to do things like riding a bike.

Tie Shoes

The skill of fastening shoelaces, which involves fine motor coordination and is commonly taught to young children as part of developing independence.

Implicit Memories

Memories that influence our behaviors and thoughts without our conscious awareness, such as skills and conditioned responses.