A Machine Cost $46,000 and Had a Useful Life of 4

question 95

Multiple Choice

A machine cost $46,000 and had a useful life of 4 years and a residual value of $7,000.What is the net present value of the machine if the annual cash flow is $16,000 and the company uses a discount rate of 10%? An annuity table shows the present value of $1 at 10% for 4 years to be 0.683.The present value of an ordinary annuity of $1 discounted at 10% for 4 years is 3.170.

• A)$16,501
• B)$33,118
• C)$9,501
• D)$13,000

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Definitions:

Fundamental Concept

Basic or essential principles that form the foundation of a particular field or discipline.

More Expensive

A term used to describe goods or services that have a higher price tag compared to other alternatives or previous prices.

Rational Decision Making

The process of making decisions based on logical reasoning, and often involves weighing the pros and cons or analyzing the costs and benefits.

Objective Decision Making

The process of making decisions based on factual information and logical analysis rather than personal feelings or bias.