The Equivalent Annual Cost Method Is Useful in Determining

question 154

Multiple Choice

The equivalent annual cost method is useful in determining:

• A) The annual operating cost of a machine if the annual maintenance is performed versus when the maintenance is not performed as recommended.
• B) The tax shield benefits of depreciation given the purchase of new assets for a project.
• C) Operating cash flows for cost-cutting projects of equal duration.
• D) Which one of two machines to acquire given equal machine lives but unequal machine costs.
• E) Which one of two machines to purchase when the machines are mutually exclusive, have different machine lives, and will be replaced once they are worn out.

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Definitions:

Sales Objection

The prospect’s opposition or resistance to the salesperson’s information or request.

Opposition

Resistance or dissent expressed against an idea, action, or authority.

Practical Objection

An overt objection based on real or concrete causes.

Major Objection

A significant concern or issue raised by a potential buyer, which may prevent a sale unless it is effectively addressed.