Use the Information Below to Answer the Following Questions -Refer to the Table Above

question 30

Multiple Choice

Use the information below to answer the following questions.
Han Ltd supplies chilli paste to large supermarket chains. The company is currently considering scrapping the old processor and investing in a new processor. Information about the investment is as follows: $$\begin{array} { l r } \text { Initial investment in processor } & \$ 105,000 \\\text { Operating cash flows over next 5 years: } & \\\quad \text { Cash receipts } & \$ 80,000 \\\quad \text { Cash payments } & \$ 40,000 \\\text { Residual value of processor in 5 years } & \$ 5,000 \\\text { Required rate of return } & 8 \% \\\text { Depreciation per antum } & \$ 20,000\end{array}$$
-Refer to the table above. What is the annual net cash flow for years 1-4?

• A)$10,000.
• B)$30,000.
• C)$40,000.
• D)$20,000.

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Definitions:

Product vs. Service

A comparison between tangible items (products) and intangible activities (services) offered in the market.

Chicken

A type of poultry and common domesticated fowl, widely consumed as meat and eggs across the globe.

Chef

A professional cook, often the head of a kitchen, who is responsible for preparing meals in restaurants or other establishments.

Intangibility

A characteristic of services that makes them unable to be seen, touched, or quantified before they are bought and used.