Fast Food, Inc $\$ 16,000$ And Has an Estimated Life of Ten Years

question 157

Multiple Choice

Fast Food, Inc. has purchased a new donut maker. It cost $\$ 16,000$ and has an estimated life of ten years. The following annual donut sales and expenses are projected:
$\begin{array}{l|r|r|}\hline \text { Sales } & & \$ 22,000 \\\hline \text { Expenses: } & & \\\hline \text { Flour, etc. (required in making donuts) } & \$ 10,000 & \\\hline \text { Salaries } & \$ 6,000 & \\\hline \text { Depreciation } & \$ 1,600 & \$ 17,600 \\\hline \text { Operating Income } & & \$ 4,400 \\\hline\end{array}$
(Ignore income taxes in this problem.)
-The payback period on the new machine is closest to which of the following?

• A) 1.4 years.
• B) 2.7 years.
• C) 3.6 years.
• D) 5.0 years.

Understand the environmental challenges cities face and their impacts on the ecosystem.

Identify different types of pollution and their effects on diverse species.

Recognize various forms of mass transit and their roles in urban settings.

Explain the factors contributing to urban growth and the implications of high population density.

---

Definitions:

Liabilities Assumed

Obligations that a company takes on as part of a transaction, such as purchasing another company or assets.

Identifiable Assets

Assets that can be separated and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract.

Measurement

The process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position or recognised in the statement of profit or loss and other comprehensive income.

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.