MakeitRite Company Is Considering the Purchase of a New Machine

question 18

Multiple Choice

MakeitRite Company is considering the purchase of a new machine for $80,000. The machine would generate an annual cash flow before depreciation and taxes of $28,778 for five years. At the end of five years, the machine would have no salvage value. The company's cost of capital is 12 percent. The company uses straight-line depreciation with no mid-year convention and has a 40 percent tax rate. What is the net present value for the machine?

• A)$-0-
• B)$5,318
• C)$85,318
• D)$23,744

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Definitions:

Sexual Orientation

A preference for partners of one’s own sex (homosexuality), the opposite sex (heterosexuality), or both (bisexuality).

Prenatal Hormones

Hormones present in the womb that play significant roles in the development and differentiation of the fetus.

Environmental Conditions

The various external factors and influences that surround and affect the life and development of organisms, including weather, climate, and pollution.

Racial/Ethnic Identity

An individual's identification with a particular racial or ethnic group, influencing one's sense of self and belonging.