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Great Enterprises Is Analyzing Two Machines to Determine Which One

question 197

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Great Enterprises is analyzing two machines to determine which one they should purchase. The company requires a 13% rate of return and uses straight-line depreciation to a zero book value.
Machine A has a cost of $285,000, annual operating costs of $8,500, and a 3-year life. Machine B
Costs $210,000, has annual operating costs of $14,000, and has a 2-year life. Whichever machine is
Purchased will be replaced at the end of its useful life. Great Enterprises should select machine
_____ because it will save the company about _____ a year in costs.


Definitions:

Consume Goods

The act of using up or purchasing products or services for direct use by the individual or household, often considered in the context of economic and environmental impact.

Symbolic Interactionist

A perspective in sociology and social psychology that focuses on how individuals interpret and give meaning to social symbols, and how this process affects social interaction and society.

Gift Giving

The act of giving items to others without expecting something of equal value in return, often to show appreciation or to celebrate a special occasion.

Extended Family

A large group of relatives, usually including at least three generations living either in one household or in close proximity.

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