Sawyer & Cecil, Computer Consultants, Is Considering an Investment in Computer

question 163

Multiple Choice

Sawyer & Cecil, Computer Consultants, is considering an investment in computer and network equipment costing $254,000. This equipment would allow them to offer new programming services to clients. The equipment will be depreciated on the straight-line basis over an eight-year period with an estimated residual value of $60,000. Using the accounting rate of return model, what is the minimum average annual operating income that must be generated from this investment in order to achieve a 12% accounting rate of return?

• A) $7,200
• B) $23,280
• C) $30,480
• D) $31,750

Acknowledge the impact of patronage on the arts during the Renaissance and Baroque periods.

Comprehend the evolution of art techniques and materials during the Renaissance and Baroque periods.

Understand the role of art in reflecting and influencing societal values and historical events.

Understand the concept of opportunity cost and how it influences individual decisions.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, determining its operating, investing, and financing activities' liquidity.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share of the company's profits through dividends.

Inventory

Inventory consists of the goods and materials that a business holds for the purpose of resale or production.