Daniels Corporation Is Considering the Purchase of New Equipment Costing

question 106

Multiple Choice

Daniels Corporation is considering the purchase of new equipment costing $30,000.The projected annual after-tax net income from the equipment is $1,200,after deducting $10,000 for depreciation.The revenue is to be received at the end of each year.The machine has a useful life of 3 years and no salvage value.Daniels requires a 12% return on its investments.The present value of an annuity of 1 for different periods follows:
$$\begin{array} { l r } \text { Periods } & \text { l2 Percent } \\\hline 1 \ldots \ldots \ldots \ldots & 0.8929 \\2 \ldots \ldots \ldots & 1.6901 \\3 \ldots \ldots \ldots & 2.4018 \\4 \ldots \ldots \ldots& 3.0373\end{array}$$ What is the net present value of the machine?

• A)$24,018.
• B)$(3,100).
• C)$30,000.
• D)$26,900.
• E)$(29,520).

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Definitions:

Association Areas

Regions of the cerebral cortex involved in integrating and interpreting information from the sensory areas, and are crucial for complex mental functions and behaviors.

Visual Input

Information received through the visual system; one of the primary ways humans gather information from the environment.

Visual Memories

Refers to the recollection of visual images, including experiences of seeing or imagining, which can be vivid and detailed, akin to a mental photograph.

Temporal Lobes

Regions of the brain located on each side of the head, associated with hearing, memory, and emotion.