Rams, Inc Has Invested in a Machine with a Cost of of $37,164

question 38

Multiple Choice

Rams, Inc. has invested in a machine with a cost of $37,164 and annual cost savings of $6,000. The discount rate is 8%, and the machine's internal rate of return is 12%. Ignore income taxes. The estimated life of the machine is:

• A) 6.2 years
• B) 8 years
• C) 12 years
• D) Cannot be determined

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Definitions:

Poisson Distribution

A distribution of probability that denotes the likelihood of a specific number of occurrences happening within a set period of time or space.

Discrete Distribution

A statistical distribution that shows the probabilities of outcomes with finite values or countable outcomes.

Interval of Time

A specific duration or length of time between two points or events.

Probability

A mathematical concept that quantifies the likelihood of an event happening, ranging from 0 (impossible) to 1 (certain).