Carlson Manufacturing Has Some Equipment That Needs to Be Rebuilt

question 103

Multiple Choice

Carlson Manufacturing has some equipment that needs to be rebuilt or replaced.The following information has been gathered relative to this decision: Carlson uses the total cost approach to net present value analysis and a discount rate of 12%.Regardless of which option is chosen,rebuild or replace,at the end of five years Carlson Manufacturing will have no future use for the equipment. If the new equipment is purchased,the present value of the annual cash operating costs associated with this alternative is:

• A)($28,840)
• B)($19,160)
• C)($14,420)
• D)($36,050)

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Definitions:

Blood Islands

Clusters of developing blood cells and vessels found in the embryonic yolk sac.

Sinus Venosus

End of the embryonic cardiac tube where blood enters the heart; becomes a portion of the right atrium, including the SA node.

Pharynx

Upper expanded portion of the digestive tube between the esophagus below and the oral and nasal cavities above and in front.

Thyroid Gland

Endocrine gland located inferior to the larynx and consisting of two lobes connected by the isthmus; secretes the thyroid hormones triiodothyronine (T3) and tetraiodothyronine (T4).