Tammy CoIs Considering Purchasing a Machine That Will Produce Annual Savings

question 39

Multiple Choice

Tammy Co.is considering purchasing a machine that will produce annual savings of $22,000 at the end of the year.Tammy requires a 12% rate of return and the asset has a 5-year useful life.What is the maximum Tammy would be willing to pay for this machine?

• A)$43,386
• B)$79,310
• C)$110,000
• D)$62,370

Comprehend the concept of marginal revenue and how it relates to a firm's pricing and output decisions.

Understand the significance of the marginal cost in profit maximization for firms in perfectly competitive markets.

Grasp the conditions under which perfectly competitive firms decide to produce or shut down in the short run.

Recognize the role of price, average total cost, and marginal cost in determining a firm's profitability.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Higher Price

An increase in the cost of a good or service, often reflecting factors like demand and supply changes, production costs, or market conditions.

Supply And Demand Theory

A basic economic principle that describes how the quantity of goods provided by producers and the quantity desired by consumers affect the market price and allocation of resources.

Sales Tax

A tax imposed by a government on sales of goods and services, typically calculated as a percentage of the purchase price.