Paramount Moving Company Is Considering Purchasing New Equipment Costing $700,000

question 101

Multiple Choice

Paramount Moving Company is considering purchasing new equipment costing $700,000.The management has estimated that the equipment will generate cash flows as follows: Present value of $1:
The company's required rate of return is 8%.Using the factors in the table,calculate the present value of the cash inflows.(Round all calculations to the nearest whole dollar.)

• A)$890,000
• B)$750,000
• C)$850,000
• D)$841,000

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Definitions:

Keiretsu

A network of interlinked Japanese companies, often bound by cross-shareholdings, collaborating closely for mutual benefit.

Kanban

A scheduling system for lean manufacturing and just-in-time manufacturing that signals the need to move materials within a production facility or to move materials from an outside supplier into the production facility.

Meishi

The Japanese term for business cards, which play a significant role in business and social etiquette in Japan.

Zaibatsu

A large Japanese business conglomerate, typically family-owned, existing before World War II and involved in multiple industries.