Robertson Is Considering Automating Its Production Line at a Cost

question 87

Multiple Choice

Robertson is considering automating its production line at a cost of $40,000 to acquire the necessary equipment. The annual cost savings are expected to be $8,000 for 14 years. The firm requires a 20% rate of return. Ignore income taxes. The net present value for this investment is

• A) Cannot be determined
• B) Positive
• C) Zero
• D) Negative

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Definitions:

Flap Their Wings

A phrase describing the action birds, and some insects, perform to take off, fly, or maintain altitude by moving their wings up and down.

Shock Avoidance

A behavioral principle where organisms learn to perform actions to prevent or avoid an unpleasant or painful stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that has become associated with a biologically significant stimulus through conditioning.

CS-US Association

The process in classical conditioning whereby a previously neutral stimulus (CS) becomes associated with an unconditioned stimulus (US) to elicit a conditioned response.