Assume You Are Considering Two Mutually Exclusive Machines and Need

question 71

Multiple Choice

Assume you are considering two mutually exclusive machines and need to select one for a cost-cutting project. Which one of these sets of characteristics best indicates the use of the equivalent annual cost method of analysis?

• A) Differing costs with no replacement at end of life
• B) Differing lives and planned replacement at end of life
• C) Differing lives with no replacement at end of life
• D) Differing manufacturers and differing operating costs
• E) Differing required returns with no replacement at end of life

---

Definitions:

Season Tickets

Tickets sold for a set number of events or performances, typically for concerts, theater performances, or sports events.

Unearned Service Revenue

Income received by a company for services yet to be performed or delivered; it is recognized as a liability until the service is provided.

Adjusting Entry

An accounting entry made in the general ledger at the end of an accounting period to update accounts so they reflect the accrual basis of accounting.

Services Performed

The execution of tasks or provision of work done for clients or customers as part of business operations.