The Management of Mashiah Corporation Is Considering the Purchase of a Machine

question 7

Multiple Choice

The management of Mashiah Corporation is considering the purchase of a machine that would cost $290,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and other costs by $102,000 per year. The company requires a minimum pretax return of 13% on all investment projects. The present value of the annual cost savings of $102,000 is closest to:

• A)$849,012
• B)$612,000
• C)$195,872
• D)$407,796

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Definitions:

Interest Groups

Organizations that seek to influence public policy and government actions without seeking to elect members to office, by lobbying, advocacy, and educational campaigns.

Bias

A predisposition or inclination, often unfair, towards a particular idea, group, or individual.

Direct Techniques

Methods used by individuals or groups to influence government policies or decisions directly, such as lobbying or referendum.

Interest Groups

Entities that strive to shape public policy and government actions to benefit their particular interests or advocacies.