The Zeron Corporation Wants to Purchase a New Machine for Its

question 129

Multiple Choice

The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $380,000.The investment is expected to generate $125,000 in annual cash flows for a period of four years.The required rate of return is 12%.The old machine can be sold for $20,000.The machine is expected to have zero value at the end of the four-year period.What is the net present value of the investment? Would the company want to purchase the new machine? Income taxes are not considered.

• A) $19,750; yes
• B) $35,775; no
• C) $360,000; yes
• D) $163,005; no

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Special authority granted to the President during times of national crisis, allowing for actions not normally permitted.

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A reserve military force composed of state National Guard militia units, which may be called upon by the state or federal government during emergencies or to fulfill other duties.

Little Rock

Capital city of the state of Arkansas, historically noted for the 1957 desegregation crisis at Little Rock Central High School, which became a landmark in the civil rights movement.