(Present Value Tables Are Required

question 33

Multiple Choice

(Present value tables are required.) Lombard Corporation is evaluating the purchase of a new machine that would have an initial cost of $120,000.This new machine would have a profitability index of 1.25.The company's discount rate is 12%.What is the present value of the net cash inflows of the new machine project?

• A)$ 14,400
• B)$ 96,000
• C)$ 150,000
• D)$1,000,000

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Definitions:

Conductors

Materials that allow the flow of electrical current due to their low resistance, such as metals.

Insulations

Materials or substances used to prevent the passage of electricity, heat, or sound from one area to another.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an expression (e.g., in 2x, 2 is the coefficient).

Ambient Air

The natural air in the environment surrounding a particular location, often considered in terms of its quality or temperature.