You Can Continue to Use Your Less Efficient Machine at a Cost

question 35

Multiple Choice

You can continue to use your less efficient machine at a cost of $8,000 annually for the next five years.Alternatively, you can purchase a more efficient machine for $12,000 plus $5,000 annual maintenance.At a cost of capital of 15 percent, you should:

• A)buy the new machine and save $600 in equivalent annual costs
• B)buy the new machine and save $388 in equivalent annual costs
• C)keep the old machine and save $388 in equivalent annual costs
• D)keep the old machine and save $580 in equivalent annual costs

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Definitions:

Effective Leadership

The ability of a leader to inspire, influence, and guide individuals or teams to achieve organizational goals with efficiency and integrity.

Leader Behavior

The actions and activities undertaken by a leader in the direction of guiding, influencing, and overseeing a group or organization.

Subordinates

Individuals in a lower position or rank within an organizational hierarchy who report to someone above them.

Recognizing Leadership

The ability to identify individuals who exhibit qualities and behaviors consistent with effective leadership.