The Management of Trylon Farms Is Considering the Purchase of Equipment

question 37

Multiple Choice

The management of Trylon Farms is considering the purchase of equipment costing $320,000.The equipment has a useful life of eight years,with $20,000 residual value.The use of this equipment will produce positive annual cash flow of $60,000 for eight years,as well as $20,000 from sale of the equipment at the end of the eighth year.Compute the net present value of this investment,discounted at an annual rate of 10%.(Present value of $1 due in eight years,discounted at 10%,is 0.467;present value of $1 received annually for eight years,discounted at 10% is 5.335. )

• A)$9,340
• B)$320,100
• C)$9,440
• D)$329,440

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Definitions:

Firearms

Portable weapons that discharge projectiles, such as bullets, through the confined burning of propellants.

Physical Violence

The use of physical force with the intent to harm or intimidate another person.

Well Planned

Activities or actions that are carefully thought out and organized in advance to achieve a specific goal.

Unarmed Robbery

The act of stealing from someone without the use of weapons.