Table 11.4 Computer Disk Duplicators, Inc. Has Been Considering Several Capital Investment

question 18

Multiple Choice

Table 11.4
Computer Disk Duplicators, Inc. has been considering several capital investment proposals for the year beginning in 2004. For each investment proposal, the relevant cash flows and other relevant financial data are summarized in the table below. In the case of a replacement decision, the total installed cost of the equipment will be partially offset by the sale of existing equipment. The firm is subject to a 40 percent tax rate on ordinary income and on long-term capital gains. The firm's cost of capital is 15 percent.
*Not applicable
-For Proposal 3, the book value of the existing asset is ________. (See Table 11.4)

• A) $21,000
• B) $43,000
• C) $52,000
• D) $80,000

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Definitions:

Cellular Respiration

The process by which cells break down glucose and other molecules to produce energy in the form of ATP.

Free Energy

The portion of a system's energy that can perform work when temperature and pressure are uniform throughout the system.

ATP

Adenosine triphosphate, a molecule that carries energy within cells, crucial for nearly all biological processes.

First Law of Thermodynamics

A principle stating that energy cannot be created or destroyed, only transformed from one form to another.