The Management of Wyoming Corporation Is Considering the Purchase of a New

question 107

Multiple Choice

The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: The present value index for this investment is:

• A) 1.00
• B) .95
• C) 1.25
• D) 1.05