Soda Manufacturing Company Provides Vending Machines for Soft-Drink Manufacturers

question 78

Multiple Choice

Soda Manufacturing Company provides vending machines for soft-drink manufacturers.The company has been investigating a new piece of machinery for its production department.The old equipment has a remaining life of four years and the new equipment has a value of $91,110 with a four-year life.The expected additional cash inflows are $30,000 per year.What is the internal rate of return?

• A) 12%
• B) 16%
• C) 10%
• D) 8%

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Definitions:

Office Supplies

Items used in offices on a regular basis for the purpose of carrying out tasks; includes items like pens, paper, and staplers.

Unearned Revenue

Money received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Trial Balance

A statement that lists all the balances of the ledger accounts, used to verify that the total of debit balances equals the total of credit balances.

General Journal

An accounting book where all transactions are initially recorded, based on the double-entry bookkeeping system, before being transferred to specific accounts.