Future Semiconductor Is Considering the Purchase of Photolithography Equipment That

question 67

Multiple Choice

Future Semiconductor is considering the purchase of photolithography equipment that will cost $3 million.The equipment requires maintenance of $5,000 at the end of each of the next five years.After five years it will be sold for $500,000.Assume a cost of capital of 15% and no taxes.What is the present value of the cost of the equipment? What is the equivalent annual cost of the equipment?

• A) $3,016,761; $899,947
• B) $2,516,760; $750,789
• C) $2,407,106; $718,077
• D) $2,768,172; $825,789

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Definitions:

Saint Alexander

Refers to several Christian saints named Alexander, recognized and venerated in various Christian denominations.

John the Baptist

A Jewish preacher and prophet in the early 1st century, known for baptizing Jesus Christ and recognized as a significant figure in Christianity, Islam, and other religions.

Santa María

The largest of the three ships used by Christopher Columbus on his first voyage across the Atlantic Ocean in 1492.

Monte

A term that can refer to a mountain or a heap of something, but contextually might need specification.