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

question 89

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 NPV = 6,000

Distinguish between unilateral and mutual mistakes and their respective effects on contract validity and enforceability.

Learn about the principles of legal assent in contract law and how courts determine the enforceability of contracts.

Understand the legal remedies and consequences of contract disputes arising from mistakes or misrepresentations.

Gain knowledge on how undue influence and duress affect the legitimacy of consensual agreements.

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Definitions:

Activity or Transaction

An economic event that involves a transfer or exchange of goods, services, or money between parties.

Environmental Economics

A subfield of economics dealing with the relationship between the economy and the environment, focusing on environmental policies and economic consequences.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be positive or negative.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by everyone and one person's use does not reduce availability to others, such as clean air.