Wright Corp Is Considering the Purchase of a New Piece

question 92

Multiple Choice

Wright Corp is considering the purchase of a new piece of equipment,which would have an initial cost of $1,000,000 and a 5 year life.There is no salvage value for the equipment.The increase in net income each year of the equipment's life would be as follows: What is the payback period?

• A)1.77 years
• B)2.06 years
• C)2.96 years
• D)3.51 years

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Definitions:

Utilities Possibilities Frontier

Represents the maximum utility levels that two individuals or more can achieve within a given set of resources, emphasizing trade-offs and efficiency.

Efficient

An economic state where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Marginal Utility

The additional utility or satisfaction a consumer gains from consuming one more unit of a good or service.

Apples

A common fruit consumed worldwide, often used as an example in economic models and comparisons.