Currently a Firm Replaces Its Equipment Every Year

question 48

Multiple Choice

Currently a firm replaces its equipment every year. It has calculated the equivalent annual cost of replacement as follows: How much can the firm save by making a replacement decision based on the economic life criterion?

• A)16
• B)22
• C)25
• D)38
• E)44

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Definitions:

Existence Needs

Basic human needs for physiological and material well-being, such as food, shelter, and safety, based on Abraham Maslow's hierarchy of needs.

Perceived O/I Ratio

The perceived ratio of outputs (rewards) to inputs (efforts), often used in organizational psychology to explain motivation and job satisfaction.

Sales Commissions

A part of compensation given to sales employees based on the volume or value of sales they have generated.

Self-evaluation

The process of reflecting on one's own performance, behaviors, skills, or qualities, often for self-improvement or personal development purposes.