ABC Already Spent $85,000 on a Feasibility Study for a Machine

question 67

Multiple Choice

ABC already spent $85,000 on a feasibility study for a machine that will produce a new product.The machine will cost $2,575,000.Required modifications will cost $375,000.ABC will need to invest $75,000 for additional inventory.The machine has an IRS approved useful life of 7 years;it is presumed to have no salvage value.It will only be operated for 3 years,after which it will be sold for $600,000.What is the total investment amount required for the machine?

• A)$3,025,000
• B)$2,950,000
• C)$2,575,000
• D)$2,350,000

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Definitions:

iPhone

A line of smartphones designed and marketed by Apple Inc., featuring a multi-touch interface, cellular connectivity, and a variety of applications.

Reasonable Care

The degree of care that a reasonably prudent person would have used under the same circumstances and conditions.

Liable

Liable refers to the state of being legally responsible for something, typically involving the obligation to compensate for damage or loss caused.

Gross Negligence

Very great negligence.