Avionics Corp

question 79

Multiple Choice

Avionics Corp. is considering the purchase of a new machine for $76,000. The machine would generate an annual cash flow of $23,214 per year for five years. At the end of five years, the machine would have no salvage value. The company's cost of capital is 12 percent. The company uses straight-line depreciation with no mid-year convention. What is the net present value for the machine, assuming no taxes are paid?

• A) $-0-
• B) $7,686
• C) $76,000
• D) $(185,500)

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Definitions:

Pending Investments

Investments or financial commitments that have been announced or planned but have not yet been executed or fully realized.

Bankrupt Companies

Businesses that are unable to meet their financial obligations and have declared bankruptcy in accordance with legal proceedings.

Social Justice

The pursuit of fairness and equality within society, aiming to address and rectify inequalities, discrimination, and injustices.