Allen College Has a Telephone System That Is in Poor

question 36

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 replacing the present system with the proposed new system is closest to:

• A)($233,300)
• B)($283,300)
• C)($263,100)
• D)($273,100)

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Definitions:

Nearsighted

A visual condition, also known as myopia, where close objects are seen clearly, but distant objects appear blurred.

Elongated

Extended or lengthened in shape or duration.

Cataract

A medical condition in which the lens of the eye becomes progressively opaque, resulting in blurred vision.

Hue

A basic property of color defined by the wavelength of light, denoting the color itself, such as red, blue, or green.