Which of the Following Machines Has the Lowest User Cost

question 94

Multiple Choice

Which of the following machines has the lowest user cost? Machine A costs $15,000 and depreciates at a 25% rate,machine B costs $10,000 and depreciates at a 20% rate,machine C costs $20,000 and depreciates at a 10% rate,and machine D costs $17,000 and depreciates at an 11% rate.The expected real interest rate is 5%.

• A)machine A
• B)machine B
• C)machine C
• D)machine D

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Definitions:

EPS Growth Rate

The rate at which a company's earnings per share (EPS) has grown or is expected to grow.

Rate of Return

The financial gain or loss encountered on an investment over a fixed term, represented as a percentage of the investment's first expenditure.

EPS

Earnings Per Share, a key indicator of a company's profitability, calculated as the company's profit divided by the number of outstanding shares.