Reference: 24_02
a Company Is Planning to Purchase a Machine

question 13

Multiple Choice

Reference: 24_02
A company is planning to purchase a machine that will cost $35,000, have a seven-year life, and be depreciated using the straight-line method with no salvage value. The company expects to sell the machine's output of 4,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below:
$\begin{array}{llr}\text{Sales} & & \$ 119,000\\\text{Costs:} & & \\\text{Manufacturing} & \$ 68,000 \\ \text{Depreciation on machine} & 5,000 \\ \text{Selling and administrative expenses} & 40,000 & \underline{(113,000) }\\\text{Income before taxes} & & \$ 6,000 \\\text{Income tax \(50 \%\) } & & \underline{(3,000) }\\\text{Net income} & & \bold{\underline{\$ 3,000}}\end{array}$
-What is the payback period for this machine?

• A) 17.50 years
• B) 11.67 years
• C) 5.00 years
• D) 4.375 years
• E) 1 year

Understand the role of revising, proofreading, and selecting appropriate channels and mediums in the completing phase.

Appreciate the benefits of thorough planning in expediting the writing process and avoiding errors.

Determine the specific purpose of the message and the desired outcome for the audience.

Recognize the importance of timing and how it affects message reception and effectiveness.

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Definitions:

Oppressed Groups

Communities or populations that experience discrimination, exploitation, or injustice by more powerful societal groups based on various factors.

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A collective, organized effort by a large group of people to achieve or resist change in society, often aiming at social or political issues.

Greater Equality

A state or condition where differences in access to resources, opportunities, and rights are minimized across individuals or groups in society.

Social Change

The alteration in societal structures and norms over time, often driven by collective behavior and cultural innovations.