Q1
Single choice
An agricultural corporation that paid 53% in income tax wanted to build a grain elevator designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income generated would be
$22,500 and annual expenditures were to be $12,000.
Answer the question using a straight line depreciation and a 10% interest rate.
If $100,000 is needed to purchase a piece of equipment 3 years from now, how much money needs to be invested today assuming a 10% rate of return (rounded to the nearest thousand)?