Nullabor Park Department Is Considering Buying a New Grass Mowing

question 20

Multiple Choice

Nullabor Park Department is considering buying a new grass mowing machine.The cost of the machine will be $150 000 and will provide annual cost savings of $40 000.The machine will have a five-year life,at which time the terminal disposal value is expected to be $20 000.Nullabor Park Department is assuming no tax consequences.If Nullabor Park Department has a required rate of return of 10%,which of the following is closest to the present value of the project?

• A)$1632
• B)$150 000
• C)$14 060
• D)$12 418

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels within a business.

Customers Served

The number of individual clients or customers that a business has provided products or services to within a specific timeframe.

Flexible Budget

A budget that dynamically adjusts in correlation with variations in volume or activity levels.

Donations

Voluntary contributions of assets, including money or goods, to a person, group, or organization without expecting any return.