Milam Company Requires a 12% Return on All Investments

question 53

Multiple Choice

Milam Company requires a 12% return on all investments. How much will the company be willing to pay for machine A if the machine will pay $8000 per year for 10 years?

• A) $2576
• B) $8000
• C) $45 202
• D) $80 000

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Definitions:

Bureau Of Labor Statistics

A U.S. government agency responsible for collecting and reporting labor market activity, working conditions, and price changes in the economy.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Weekly

Pertains to something that occurs, is done or calculated every week.

Basket Of Goods

A fixed set of consumer products and services valued on a regular basis for measuring inflation in an economy or specific market.