Bearings from an Engine Are Being Inspected

question 7

Multiple Choice

Bearings from an engine are being inspected. It is observed that the most wear starts at the furthest point away from the location of the oil pump and is noticeable less as you get closer to the pump. Technician A says that could be due to a condition known as dry starts. Technician B says that this is most likely due to incorrect drive belt tension. Who is correct?

• A) A only
• B) B only
• C) Both A and B
• D) Neither A nor B

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Definitions:

Opportunity Cost

A cash flow that a firm must forego to accept a project. For example, if the project requires the use of a building that could otherwise be sold, the market value of the building is an opportunity cost of the project.

Overall WACC

A comprehensive measure of a company's cost of capital, incorporating the weighted costs of its equity and debt financing.

Risk Projects

Investment initiatives or projects that carry a significant degree of uncertainty or risk regarding their outcomes or potential returns.

Capital Sources

Capital sources refer to the origins of the financial resources that businesses use to fund their operations and growth, including debt and equity.