Dominik Corporation Purchased a Machine 5 Years Ago for $527,000

question 80

Multiple Choice

Dominik Corporation purchased a machine 5 years ago for $527,000 when it launched product M08Y. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 310 machine costing $545,000 or by a new model 240 machine costing $450,000. Management has decided to buy the model 240 machine. It has less capacity than the model 310 machine, but its capacity is sufficient to continue making product M08Y. Management also considered, but rejected, the alternative of dropping product M08Y and not replacing the old machine. If that were done, the $450,000 invested in the new machine could instead have been invested in a project that would have returned a total of $532,000.In making the decision to invest in the model 240 machine, the opportunity cost was:

• A) $545,000
• B) $450,000
• C) $532,000
• D) $527,000

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Definitions:

Polyunsaturated

A type of fat found in plants and fish that contains more than one unsaturated carbon bond in its molecules, known to be beneficial for heart health.

Kilocalorie Intake

The total amount of energy consumed in the form of food or drinks, measured in kilocalories (also known as Calories), crucial for maintaining body functions and energy levels.

Energy Requirements

The amount of energy, measured in calories, that an individual needs to maintain their body weight and support daily activities.

Weight Increases

A condition or period where there is a gain in body weight, which can be due to a variety of factors including diet, health conditions, and lifestyle.