Jark Corporation Has Invested in a Machine That Cost $60,000

question 304

Multiple Choice

Jark Corporation has invested in a machine that cost $60,000, that has a useful life of six years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of four years. Given these data, the simple rate of return on the machine is closest to (Ignore income taxes.) :

• A) 8.3%
• B) 7.2%
• C) 9.5%
• D) 25%

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Definitions:

Prisoners' Dilemma

A situation in game theory where two individuals acting in their own best interest do not produce the optimal outcome for either party.

Military Production

The manufacture and supply of equipment, materials, and services for armed forces and defense purposes.

Tit-For-Tat Strategy

A strategy in game theory where a player replicates an opponent's previous move, typically used in iterative situations to foster cooperation.

Price Wars

A competitive strategy where companies continuously lower prices to undercut competitors, often at the expense of profit margins.