chapter 20 quiz

# chapter 20 quiz - 1 Question 1 Multiple ChoiceID 5630730...

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1 Question 1 - Multiple ChoiceID: 5630730 - The correct answer has been circled. Question: You are currently 25, and would like to retire at age 45 and be able to withdraw from your savings \$150,000 at the end of each year from then until age 85. You plan to save by making equal investments for the next 20 years. You believe you will earn 10% per year on your investments, and will leave the money invested at 10% until it is completely used up at age 85. Note: Present value and future value tables are needed. How much money will you need to accumulate by the time you retire? \$1,009,200 \$1,277,100 \$1,466,850 \$6,789,000 Question 2 - Multiple ChoiceID: 5630752 - Correct Question: McKenna Company is considering acquiring a new machine costing \$400,000. The machine is expected to generate annual operating cash inflows of \$100,000 for each of the first four years, \$75,000 in both years five and six, and have a salvage value of \$30,000 after six years. What is the present value of the machine, assuming that McKenna’s minimum rate of return is 10%? \$5,875 \$22,795 \$106,420 \$52,795 Question 3 - Multiple ChoiceID: 5630714 - The correct answer has been circled. Question: Which of the following statements is incorrect?

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