(Present Value Tables Are Required

question 141

Multiple Choice

(Present value tables are required.) Baker Enterprises is evaluating the purchase of a new computer network system.The new system would cost $24,000 and have a useful life of 6 years.At the end of the system's life,it would have a residual value of $3,000.Annual operating cost savings from the new system would be $8,800 per year for each of the six years of its life.Baker Enterprises has a minimum required rate of return of 12% on all new projects.The net present value of the new network system would be closest to:

• A)$ 10,656.
• B)$ 12,177.
• C)$ 13,698.
• D)$ 37,698.

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Definitions:

Conditioned Stimulus

An initially neutral stimulus that, through association with an unconditioned stimulus, comes to elicit a conditioned response over time.

Cinnamon Rolls

Sweet baked goods made from dough that is rolled around a filling of cinnamon, sugar, and sometimes raisins or nuts, then sliced and baked.

Smell

A sense that detects chemical substances in the environment, allowing organisms to perceive odors and fragrances through specialized sensory cells.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.