Forge Company Wants to Purchase a New Cutting Machine for Its

question 7

Multiple Choice

Forge Company wants to purchase a new cutting machine for its sewing plant.The investment is expected to generate annual cash inflows of $120,000.The required rate of return is 10% and the current machine is expected to last for four years.What is the maximum dollar amount the company would be willing to spend for the machine,assuming its life is also four years? Income taxes are not considered.

• A) $273,500
• B) $460,800
• C) $355,950
• D) $380,280

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Definitions:

Different Stages

Pertains to the various phases or steps within a process or development cycle.

Disjunctive Task

A type of group task that is solved best by the most capable member of the group, where the group's performance is determined by its strongest link.

Group Performance

The level of achievement or productivity of a team or group working together on shared goals.

Conjunctive Task

is a group task that can only be completed successfully if each member of the team performs their part; the group's performance is thus limited by the weakest link.