A Company Is Considering the Purchase of a New Machine

question 23

True/False

A company is considering the purchase of a new machine for $48,000. Management expects that the machine can produce sales of $16,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $8,000 per year plus depreciation of $4,000 per year. All revenues and expenses except depreciation are on a cash basis. The payback period for the machine is 6 years.

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that activates what is often termed the fight or flight response, preparing the body for rapid action in response to threats.

Central Nervous System

The complex system of nerves consisting of the brain and spinal cord that regulates and coordinates body activities.

Parasympathetic Nervous System

The parasympathetic nervous system is part of the autonomic nervous system responsible for conserving energy and bringing the body to a restful state after periods of stress or danger.

Somatic Nervous System

The part of the peripheral nervous system that handles voluntary control of body movements via skeletal muscles, and conveys sensory and motor information to and from the central nervous system.