You Are Considering the Purchase of a New Machine

question 63

Multiple Choice

You are considering the purchase of a new machine. Your analysis includes the evaluation of two machines that have differing initial and ongoing costs and differing lives. Whichever machine is purchased will be replaced at the end of its useful life. You should select the machine that has the:

• A) longest life.
• B) highest annual operating cost.
• C) lowest annual operating cost.
• D) highest equivalent annual cost.
• E) lowest equivalent annual cost.

---

Definitions:

Seasoning Packets

Pre-measured spices and herbs combinations sold in small packets used to enhance the flavor of dishes without the need for separate seasoning ingredients.

Demand

The consumer's desire and willingness to pay a price for a specific good or service.

Buyer-supplier Relationship

The dynamic interaction between companies that buy goods and services and those that sell them.

Strategic Items

Products or components critical to a company's competitive position and operational performance.