Clairmont Corporation Is Considering the Purchase of a Machine That

question 1

Multiple Choice

Clairmont Corporation is considering the purchase of a machine that would cost $150,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $37,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:

• A)($6,409)
• B)($11,295)
• C)$1,385
• D)($16,615)

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Definitions:

Circulation

The movement of substances such as blood or air within a system, such as the circulatory system in an organism or the atmosphere in the case of air.

Memory

The mental function that enables individuals to retain information and recall experiences and knowledge.

Cognition

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Alcohol Use

Alcohol use refers to the consumption of beverages that contain ethyl alcohol, which can range from moderate drinking to sustaining alcohol dependency or abuse.