Two Types of Batteries Are Being Considered for Use in Electric

question 313

Multiple Choice

Two types of batteries are being considered for use in electric golf carts. Burnout brand has a three year life, while Long-lasting brand has a five year life. You must choose between the two batteries and you expect to replace the brand you ultimately choose continuously. You should:

• A) Take the option with the greater NPV.
• B) Take the option with the lower NPV.
• C) Take the option with the greater EAC.
• D) Take the option with the smaller EAC.
• E) Take the option with the lowest accounting break-even.

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Definitions:

Statement of Owner's Equity

A financial statement that shows the changes in the equity of a sole proprietorship over a period of time.

Worksheet

A worksheet in accounting is a document used for planning adjustments and reconciling accounts, aiding in the preparation of financial statements.

Income Statement

An Income Statement is a financial statement that shows a company's revenues and expenses over a specific period of time, culminating in net profit or loss.

Balance Sheet

An outline that captures a company's assets, debts, and the equity of its shareholders at a distinct point, illustrating the company's financial standing.