(Present Value Tables Are Required

question 2

Multiple Choice

(Present value tables are required.) Home Products,Inc.is evaluating the purchase of a new machine to use in its manufacturing process.The new machine would cost $40,000 and have a useful life of 6 years.At the end of the machine's life,it would have a residual value of $2,500.Annual cost savings from the new machine would be $12,400 per year for each of the six years of its life.Home Products,Inc.has a minimum required rate of return of 16% on all new projects.The net present value of the new machine would be closest to:

• A)$ 4,669.
• B)$ 5,694.
• C)$ 6,719.
• D)$46,719.

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Definitions:

Somatic Cell

Any cell of a living organism other than the reproductive cells.

Egg

Female gamete.

Sperm

Male gamete.

DNA Replication

Process by which a cell duplicates all of its DNA before it divides.