12 Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual income from the equipment is $2,400, after deducting $22,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The present value of an annuity of $1 for different periods follows: Periods 10% 2.65 points 1 0.9091 2 1.7355 8 3 2.4869 02:12:17 4 3.1699 eBook What is the net present value of the machine (rounded to the nearest whole dollar)? Multiple Choice $54,712. О $(5,320). О $66,000. $60,680. $2,400.
12 Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual income from the equipment is $2,400, after deducting $22,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The present value of an annuity of $1 for different periods follows: Periods 10% 2.65 points 1 0.9091 2 1.7355 8 3 2.4869 02:12:17 4 3.1699 eBook What is the net present value of the machine (rounded to the nearest whole dollar)? Multiple Choice $54,712. О $(5,320). О $66,000. $60,680. $2,400.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 3MC: Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of...
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