Whitton Corporation uses a discount rate of 16%. The company has an opportunity to buy a machine now for $18,000 that will yield cash inflows of $10,000 per year for each of the next three years. The machine would have no salvage value. The net present value of this machine is closest to (Ignore income taxes.):See separate Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
A. $12,000
B. $(9,980)
C. $22,460
D. $4,460
Answer: D
You might also like to view...
On the reporting of liabilities where a range of values exists as a possible outcome, IFRS requires which of the following points to be recorded as a provision, if the outcome is probable?
a. Low end of the range. b. High end of the range. c. Midpoint of the range. d. IFRS presents no specific guidance as to this point.
What are the steps in the business-to-business buying decision process? Discuss how they are different from the steps in the consumer decision process
What will be an ideal response?
What is another name for the main purpose doctrine?
a. The collateral promise rule. b. The possibility test. c. The leading object rule. d. The suretyship provision.
The cash conversion cycle is comprised of the production cycle minus the collection cycle plus the payment cycle
Indicate whether the statement is true or false.