Two Types of Batteries Are Being Considered for Use in Electric

question 229

Multiple Choice

Two types of batteries are being considered for use in electric golf carts. Burnout brand has a three year life, while Long-lasting brand has a five year life. You must choose between the two batteries
And you expect to replace the brand you ultimately choose continuously. You should:

• A) Take the option with the greater NPV.
• B) Take the option with the lower NPV.
• C) Take the option with the greater EAC.
• D) Take the option with the smaller EAC.
• E) Take the option with the lowest accounting break-even.

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Definitions:

IFRS

International Financial Reporting Standards - a set of accounting standards developed by the International Accounting Standards Board that is used globally.

Intangibles

Assets that cannot be touched or physically measured, such as patents, copyrights, and trademarks.

Amortized

The process of gradually writing off the initial cost of an asset over a period, thereby reducing its book value on a company's balance sheet.

Expensed

Expensed items refer to costs that are charged against revenue in the current accounting period instead of being capitalized or recorded as an asset.