Use This Information to Answer the Following Question

question 96

Multiple Choice

Use this information to answer the following question. You have the opportunity to purchase a machine for $10,000.After careful study of expected costs and revenues,you estimate that the machine will produce a net cash flow of $3,200 annually and will last 5 years.Based on an interest rate of 7 percent,determine the present value of the machine and if the machine should be purchased.

• A)$13,120,the machine should not be purchased
• B)$13,120,the machine should be purchased
• C)$2,282,the machine should not be purchased
• D)$7,130,the machine should not be purchased

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Definitions:

Negotiating

The process of discussing and reaching a mutual agreement between parties with differing needs or opinions.

Added Value Negotiating

A negotiation technique that focuses on creating additional value that can be shared between the parties, rather than merely splitting existing value.

Deal Packages

Packages of compensation and benefits offered to employees, often during negotiations for high-level positions.

Single Outcome

A result or consequence that is the only possible end of a process or an action, without any alternative results.