Dan Is Comparing Three Machines to Determine Which One to Purchase

question 68

Multiple Choice

Dan is comparing three machines to determine which one to purchase. The machines sell for differing prices, have differing operating costs and machine lives, and will be replaced when worn out. Which one of the following computational methods should Dan use as the basis for his decision?

• A) Internal rate of return
• B) Net present value
• C) Equivalent annual cost
• D) Depreciation tax shield
• E) Bottom-up operating cash flow

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Definitions:

Pheromone Information

Data or signals transmitted through chemicals released by one individual that can affect the behavior or physiological state of another individual, typically within the same species.

Olfactory Epithelium

A specialized epithelial tissue inside the nasal cavity involved in the sense of smell, containing olfactory receptor cells that detect airborne molecules.

Accessory Olfactory Bulb

is a neural structure in the brain that processes pheromonal and chemical signals, involved in various social and reproductive behaviors.

Neurotransmitters

Chemical messengers that transmit signals across a chemical synapse, from one neuron to another, influencing various physiological functions.