Use the Information Below to Answer the Following Questions -Refer to the Table Above

question 15

Multiple Choice

Use the information below to answer the following questions.
Han Ltd supplies chilli paste to large supermarket chains. The company is currently considering scrapping the old processor and investing in a new processor. Information about the investment is as follows: $$\begin{array} { l r } \text { Initial investment in processor } & \$ 105,000 \\\text { Operating cash flows over next 5 years: } & \\\quad \text { Cash receipts } & \$ 80,000 \\\quad \text { Cash payments } & \$ 40,000 \\\text { Residual value of processor in 5 years } & \$ 5,000 \\\text { Required rate of return } & 8 \% \\\text { Depreciation per antum } & \$ 20,000\end{array}$$
-Refer to the table above. Using the Net Present Value approach the management of Han Ltd will make which of the following decisions?

• A)Accept the investment proposal and purchase the new processor.
• B)Retain the current processor and buy the new processor.
• C)Retain the current processor.
• D)Increase the residual value of the processor.

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Definitions:

Axial Skeleton

The central part of the skeleton, comprising the skull, vertebral column, ribs, and sternum, providing support and protection for the body's vital organs.

Appendicular Skeleton

The portion of the skeleton that includes the bones of the upper and lower limbs, and the shoulder and pelvic girdles.

Sternum

The long, flat bone located in the center of the chest, also known as the breastbone.

Painful Inflammation

A bodily response to injury or infection, characterized by pain, redness, swelling, and sometimes loss of function.