Aaron Co Is Considering Purchasing a New Machine Which Will Cost

question 12

Multiple Choice

Aaron Co. is considering purchasing a new machine which will cost $200,000, but which will decrease costs each year by $40,000. The useful life of the machine is 10 years. The machine would be depreciated straight-line with no residual value over its useful life at the rate of $20,000/year. The cash payback period is

• A) 4.0 years.
• B) 4.5 years.
• C) 5.0 years.
• D) 10.0 years.

Recognize the significance of key legislation in shaping antitrust enforcement and business conduct.

Understand the impact of deregulation on specific industries and the overall economy.

Analyze the rationale and consequences of government intervention in preventing monopolies and promoting competitive practices.

Understand the impact of mergers and acquisitions on industry concentration ratios.

---

Definitions:

Monetary Cost

Monetary cost refers to the total amount of money that is spent to purchase goods or services.

Opportunity Cost

The benefit that is missed or given up when an investor, individual, or business chooses one alternative over another.

Bavarian Beer

A type of beer that originates from Bavaria, Germany, known for its strict brewing laws and quality standards.

Opportunity Cost

The value of the next best alternative that is forgone as a result of making a decision.