The capacity of a memory device can be calculated using the formula (2^{\text{number of address inputs}} \times \text{number of data outputs}). With 16 address inputs, the number of addressable locations is (2^{16} = 65,536). Since there are four data outputs, each location can hold 4 bits. Therefore, the total capacity is (65,536 \times 4 \text{ bits} = 262,144 \text{ bits}) or 32,768 bytes (or 32 KB).
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