MakeitRite Company Is Considering the Purchase of a New Machine

question 18

Multiple Choice

MakeitRite Company is considering the purchase of a new machine for $80,000. The machine would generate an annual cash flow before depreciation and taxes of $28,778 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 and has a 40 percent tax rate. What is the net present value for the machine?

• A)$-0-
• B)$5,318
• C)$85,318
• D)$23,744

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Definitions:

Couples Therapy

The treatment of both partners in a committed, intimate relationship, in which the main focus is on relationship issues.

Client-Centered Therapist

A mental health professional who uses a therapeutic approach focusing on creating a supportive, non-judgmental environment to facilitate a client’s growth and self-discovery.

Rapport

The development of a close and harmonious relationship in which individuals understand each other's feelings or ideas and communicate well.

Inconsistencies

Situations or statements that are not consistent, containing contradictions or discrepancies.