Future Semiconductor Is Considering the Purchase of Photolithography Equipment That

question 42

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:

Rigidity

The quality of being unable to bend or be forced out of shape; applied to organizations, it often refers to the inflexibility in rules, procedures, and management.

Flexibility

The capacity to adapt to new, different, or changing requirements and conditions.

Tactical Planning

Short-term, detailed planning that focuses on achieving specific goals or objectives within a limited timeframe.

Mitigation Planning

A strategic approach to lessen the severity and impact of potential risks and disasters on a project or organization.