Bruno's, Inc

question 29

Essay

Bruno's, Inc. is analyzing two machines to determine which one it should purchase. The company requires a 14% rate of return and uses straight-line depreciation to a zero book value. Machine A has a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Bruno's purchase and why? (Round your answer to whole dollars.)

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Definitions:

Open System

An organizational or systemic concept where continuous interaction with the environment is necessary for sustainability and growth.

Nonprofit Organization

An entity that operates for a purpose other than making a profit, often focusing on philanthropic, educational, or social missions.

Organizational Culture

The shared values, beliefs, norms, and practices that shape the social and psychological environment of a business or organization.

Schein's Three Categories

A framework identifying three levels of organizational culture: artifacts, espoused values, and underlying assumptions.