Charlie Corporation Is Considering Buying a New Donut Maker

question 202

Multiple Choice

Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3,740 a year to operate, as opposed to the old machine, which costs $4,150 per year to operate. Also, because of increased capacity, an additional 21,400 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $8,400 and the new machine costs $31,400. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.) :

• A) $2,550
• B) $410
• C) $2,140
• D) $6,260

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Definitions:

Indiscretions

Actions or behaviors that are considered unwise or improper, often leading to social disapproval or embarrassment.

Emotion

A complex state of feeling that results in physical and psychological changes that influence thought and behavior.

Evolutionary Perspective

A view in psychology that emphasizes the role of evolutionary processes in shaping behaviors, mental functions, and traits to solve problems of survival and reproduction.

Long-Term Mating

The pursuit of strategies aimed at forming lasting romantic relationships, emphasizing emotional connection and compatibility.