Allen College Has a Telephone System That Is in Poor

question 38

Multiple Choice

Allen College has a telephone system that is in poor condition. The system can be either overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives: Allen College uses a 12% discount rate and the total cost approach to net present value analysis. Both alternatives are expected to have a useful life of eight years. The net present value of the alternative of overhauling the present system is closest to:

• A)($238,232)
• B)($108,000)
• C)($228,232)
• D)($232,272)

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Definitions:

Catabolic Reactions

Biochemical reactions that break down molecules into simpler forms, often releasing energy usable by the cell.

Monosaccharide

The most basic type of carbohydrates, made up of one sugar unit, for example, glucose or fructose.

Polysaccharide

A carbohydrate molecule composed of long chains of monosaccharide units bound together by glycosidic linkages.

Fructose

A simple sugar found in many plants, where it is often bonded to glucose to form the disaccharide sucrose.