In 2016,Kendall Ford,an automobile dealership,spent $20,000 on a new car lift for its repair shop,$2,000 on a new copy machine for its sales division,and $600,000 on Ford Motor company stock.Unsold cars and trucks were valued at $400,000 on January 1,2016 and unsold cars and trucks were valued at $900,000 on December 31,2016.What is Kendall Ford's total investment spending in 2016?

Question

Quizplus · Accepted Answer

Total investment spending includes capital expenditures (the car lift and copy machine) and purchases of stock. Additionally, changes in inventory are factored in, so the increase in the value of unsold cars and trucks from $400,000 to $900,000 is also considered. Therefore, the total investment spending is:
$20,000 (car lift) + $2,000 (copy machine) + $600,000 (Ford stock) + ($900,000 - $400,000) = $522,000. 
So, the correct answer is option C.

In 2016,Kendall Ford,an Automobile Dealership,spent $20,000 on a New Car