TEK, Inc, Is Considering Whether to Replace a Production Machine with with a Newer

question 41

Multiple Choice

TEK, Inc., is considering whether to replace a production machine with a newer model of the same machine. If TEK keeps the old machine, the trade-in value of the old equipment is an example of a(n)

• A)sunk cost.
• B)opportunity cost.
• C)avoidable cost.
• D)imputed cost.

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Definitions:

Trials

In statistics, trials refer to the number of attempts or individual experiments conducted during a study.

Binomial Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent states across a series of trials or experiments.

Hypergeometric Distribution

A discrete probability distribution that describes the probability of a given number of successes in draws from a finite population without replacement.

Probability Of Success

The likelihood of an outcome occurring that is deemed a success in a given trial or experiment.