Forge Company wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual cash inflows of $120,000. The required rate of return is 10% and the current machine is expected to last for four years
What is the maximum dollar amount the company would be willing to spend for the machine, assuming its life is also four years? Income taxes are not considered.
A) $273,500
B) $460,800
C) $355,950
D) $380,280
Answer: D
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By convention, short-term financial control is accomplished by all the following except:
a. Comparing actual to budgeted financial results. b. Calculating a series of cost and revenue variances at the end of the period. c. The use of flexible budgets and standard costs. d. Explaining the total operating-income variance for a given period. e. The use of productivity analysis.
The primary goal of financial management is to maximize:
A. Current profits B. Market share C. Current dividends D. The market value of existing stock E. Revenue growth