Vextra Corporation Is Considering the Purchase of New Equipment Costing $$\begin{array} { c l } \text { Periods } & 12 \% \\1 & 0.8929 \\2 & 1.6901 \\3 & 2.4018 \\4 & 3.0373\end{array}$$

question 27

Multiple Choice

Vextra Corporation is considering the purchase of new equipment costing $35,000. The projected annual cash inflow is $11,000, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Vextra requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: $$\begin{array} { c l } \text { Periods } & 12 \% \\1 & 0.8929 \\2 & 1.6901 \\3 & 2.4018 \\4 & 3.0373\end{array}$$ What is the net present value of the machine?

• A) $(33,410).
• B) $(3,100).
• C) $35,000.
• D) $3,410.
• E) $(1,590).

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Definitions:

Scrap Metal

Waste metal materials that can be recycled and reused, often collected from leftover products, buildings, or discarded industrial machinery.

Energy

The capacity to do work, manifest in forms such as heat, light, motion, and chemical bonds, essential to human society for various applications.

Transfer Heat

The movement of thermal energy from one object or substance to another, through various modes such as conduction, convection, or radiation.

Radioisotopes

Radioactive isotopes of an element, used in various scientific, medical, and industrial applications due to their radioactive decay properties.