Answer the Following Questions Using the Information Below:
Pizza for Everyone

question 94

Multiple Choice

Answer the following questions using the information below:
Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:
$\begin{array}{lrr}&\text { Existing van }&\text { New van }\\\text { Ori ginal cost } & \$ 50,000 & \$ 90,000 \\\text { Annual operating cost } & \$ 17,500 & \$ 10,000 \\\text { Accumulated depreciation } & \$ 30,000 & - \\\text { Current salvage value of the existing van } & \$ 22,500 & -\\\text { Remaining life } & 10 \text { years } & 10 \text { years } \\\text { Salvage value in } 10 \text { years } & \$ 0 & \$ 0 \\\text { Annual depreciation } & \$ 2,000 & \$ 9,000\end{array}$
-If Pizza For Everyone replaces the existing delivery van with the new one,over the next 10 years operating income will ________.

• A) decrease by $90,000
• B) increase by $75,000
• C) decrease by $75,000
• D) increase by $90,000

Appreciate the role of social and cultural factors in emotional expression and motivation.

Understand the concept of disbursement and collection float and their impacts on a firm's cash management.

Identify the components and strategies that affect collection float.

Recognize the significance of electronic transactions and their influence on reducing collection and disbursement floats.

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Definitions:

Annuity Payments

Regular fixed payments received from an investment over a specified period of time.

Time Value

The belief that money possessed today holds more value than the equivalent amount in the future, owing to its potential to generate income.

Money

Money is a medium of exchange that nations have adopted to facilitate the sale, purchase, or trade of goods, services, and other transactions.

Future

A contract to buy or sell a specified asset at a predetermined price at a specified time in the future, used for hedging or speculation.