Mark Is Considering Spending $25,000 on a Farm Tractor That

question 106

Multiple Choice

Mark is considering spending $25,000 on a farm tractor that will increase his crop yield and bring additional revenues of $4,000 for each of the next seven years. Mark should:

• A) buy the tractor because its benefits of $28,000 outweigh its costs of $25,000.
• B) buy the tractor because inflation will reduce the value of future cash flows.
• C) use present discounted value analysis to decide whether the tractor is a good investment.
• D) not buy the tractor because the payback period extends beyond three years.

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Definitions:

Standard Form

A way of presenting logical arguments with all premises listed first, followed by the conclusion, often used to clarify logical structure.

Categorical Propositions

Statements that assert or deny that all or some of the members of one category are included in another.

Copula

A linking verb in a sentence, often a form of "to be", connecting the subject to a subject complement.

Non-categorical

Pertains to statements or propositions that do not fit neatly into predefined categories or classifications.