(Ignore Income Taxes in This Problem

question 54

Multiple Choice

(Ignore income taxes in this problem.) Lichty Car Wash has some equipment that needs to be rebuilt or replaced. The following information has been gathered concerning this decision: Lichty uses the total-cost approach and a discount rate of 10% in making capital budgeting decisions. Regardless of which option is chosen, rebuild or replace, at the end of five years Mr. Lichty plans to close the car wash and retire.
-If the new equipment is purchased,the present value of all cash flows that occur now is:

• A)$(45,000)
• B)$(39,000)
• C)$(37,000)
• D)$(34,000)

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Definitions:

Concrete Operations

Pertains to the stage in Piaget's theory of cognitive development (typically age 7-11) where children gain the ability to think logically about concrete events.

Similar Objects

Similar objects refer to items or entities that share common attributes, characteristics, or appearances, making them alike in some respects.

Symbolic Play

A type of play in which children use objects, actions, or ideas to represent other objects, actions, or ideas, playing a crucial role in language and cognitive development.