A Company Is Considering Purchasing a New Machine, at a Cost

question 58

Multiple Choice

A company is considering purchasing a new machine, at a cost of $50,000. This amount will be written off over 5 years at $10,000 per year. The company will have to increase its accounts receivable by $4,000 in the first year. The disposal value of the machine being replaced is $1,500. What is the initial working capital investment required?

• A) $54,000
• B) $52,500
• C) $36,000
• D) $4,000
• E) $2,500

---

Definitions:

Reasonable Blind Person

A hypothetical standard used in legal contexts to assess accessibility or accommodations required for blind individuals to ensure equal opportunities.

Standard of Care

The level of competence, diligence, and prudence that a reasonable person would exercise in similar circumstances, often used in legal and medical contexts.

Intentionally

Done with purpose or deliberate intention; actions taken with a clear aim or objective in mind.

Negligent Conduct

Actions or failures to act that breach a duty of care owed to others, resulting in harm or injury.