Turk Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows:End ofYearMachine?AB1$5,000 $1,000 2 4,000 2,000 3 2,000 11,000 Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Turk purchase?
A. Neither machine is acceptable.
B. Both machines are acceptable, but A should be selected because it has the greater net present value.
C. Both machines are acceptable, but B should be selected because it has the greater net present value.
D. Only Machine A is acceptable.
E. Only Machine B is acceptable.
Answer: E
You might also like to view...
If preferred dividends are limited to the stated dividend rate, the stock is said to be
a. participating; b. nonparticipating; c. cumulative; d. noncumulative; e. convertible
Which of the following people is most likely to have opportunities to commit fraud?
a. Rob is a convicted bank robber who has been out of jail for 7 years and is working for a small firm whose manager knows about Rob's criminal background. b. Jane is a recent high school graduate who loves shopping. She is on the look out for a job. c. Steve was just hired by his company but he is always acting suspicious d. 62 year old Dave has loyally worked up his company's corporate ladder for the past 24 years
Mahmoud sent a thank-you e-mail message to his interviewer immediately after his interview. It's been more than five days now, and Mahmoud has still not heard from the employer. What action should Mahmoud take now?
A) Assume that no decision has been made yet and that a call could come soon. B) Assume that he didn't get the job and continue his job search with other companies. C) Send an e-mail indicating that he understands that he did not get the position to save the interviewer time. D) Call or send an e-mail message to check the status of the position.
The three basic ratios used in the DuPont system of analysis are ________.
A) net profit margin, total asset turnover, and return on investment B) net profit margin, total asset turnover, and return on equity C) net profit margin, total asset turnover, and financial leverage multiplier D) net profit margin, financial leverage multiplier, and return on equity