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Abdul Corporation Bought a New Machine,which Cost $90,000,has a Useful

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Essay

Abdul Corporation bought a new machine,which cost $90,000,has a useful life of 10 years,and will generate annual cash inflows of $25,000.The residual value of the machine is $5,500.What is the payback period?


Definitions:

Large Fixed Costs

Expenses that do not change in total regardless of changes in the volume of goods or services produced.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced.

Price Elasticity Of Demand

The ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand curve.

Price Discrimination

The approach of marketing identical products to various customers at various prices, determined by their readiness to pay.

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