A Currently Used Machine Costs $10,000 Annually to Run

question 50

Multiple Choice

A currently used machine costs $10,000 annually to run.What is the maximum that should be paid to replace the machine with one that will last three years and cost only $4,000 annually to run? The opportunity cost of capital is 12 percent.

• A)$2,000
• B)$9,607
• C)$14,411
• D)$24,018

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Definitions:

Glucagon

A hormone produced by the pancreas that raises blood glucose levels, acting as a counter-regulatory hormone to insulin.

Progesterone

A steroid hormone released by the corpus luteum and important in the regulation of reproduction, preparing the uterus for implantation of a fertilized egg and maintaining pregnancy.

Cortisol

Cortisol is a steroid hormone produced by the adrenal glands, involved in the response to stress and metabolism regulation, including the control of blood sugar levels.

Prolactin

A hormone released by the pituitary gland that stimulates milk production in lactating females and has various other effects in both sexes.