You Are Evaluating Two Different Machines

question 113

Multiple Choice

You are evaluating two different machines. Machine A costs $25,000, has a five-year life, and has an annual OCF (after tax) of -$6,000 per year. Machine B costs $30,000, has a seven-year life, and has an annual OCF (after tax) of -$5,500 per year. If your discount rate is 10 percent, using EAC which machine would you choose?

• A) Machine A
• B) Machine B
• C) Both Machines A and B
• D) Neither Machine A nor B

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Definitions:

Disinhibition

The reduction of restraint or inhibition in social situations, often facilitated by anonymity or group dynamics.

Online Groups

Communities or collections of individuals who interact through digital platforms, sharing interests, goals, or purposes via the internet.

Norms

Shared expectations and rules that guide behavior within a group or society, often unspoken and learned through social interaction.

Reactance Theory

Suggests that individuals may react against threats to their freedom of choice by doing the opposite of what they are being pushed towards, to reassert their autonomy.