A Company Bought a Machine That Has an Expected Life

question 2

Multiple Choice

A company bought a machine that has an expected life of six years and no salvage value.Management estimates that this machine will generate annual after-tax net income of $700.If the accounting rate of return is 10%,what was the purchase price of the machine?

• A) $7,000
• B) $700
• C) $28,000
• D) $14,000
• E) $3,500

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Definitions:

Extrinsic Motivation

Refers to motivation that comes from external factors or rewards, such as money, fame, grades, and praise, rather than internal desire or interest.

Unpleasant Situation

A scenario or condition that is disagreeable or uncomfortable for the individuals involved.

Pyramid Of Needs

A theory in psychology, proposed by Abraham Maslow, that prioritizes human needs from the most basic physiological needs to self-actualization.

Overeating

Consuming food in quantities larger than the body's energy requirements, often leading to weight gain and potential health issues.