​A Manager Invests $20,000 in Equipment That Would Help the Company

question 32

Multiple Choice

​A manager invests $20,000 in equipment that would help the company reduce it's per unit costs from $15 to $12.He expects the equipment to be in use for the next seven years.After two years,he realizes that if he outsourced the production,the unit cost would be $7 instead.At this point what should the senior manager do?

• A)​Charge the manager for the next five years of depreciation
• B)Write off the equipment as sunk cost and allow for outsourcing since it is cheaper
• C)Not allow for outsourcing since the equipment is good for another five years
• D)​None of the above

Formulate confidence intervals for population means with known or unknown population standard deviations.

Construct confidence intervals for population proportions.

Interpret the results of confidence interval estimates in context.

Differentiate between the effects of sample size and confidence level on the width of a confidence interval.

---

Definitions:

Present Value Index

The Present Value Index is a financial metric used to evaluate the viability of a project or investment by comparing its present value of future cash flows to the initial investment.

Investment Proposals

Documents or presentations by a company or individual seeking to attract investors by outlining potential investment opportunities and expected returns.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Cash Payback Period

The length of time required for an investment to generate cash flows sufficient to recover the initial outlay.