You Are Considering the Purchase of One of Two Machines

question 90

Multiple Choice

You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $100 initially, and then $150 per year in maintenance costs. Machine B costs $200 initially, has a life of three years, and requires $120 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. Which is the better machine for the firm? The discount rate is 12% and the tax rate is zero.

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

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Definitions:

Park's Race Relations Cycle

A sociological model proposed by Robert E. Park that outlines the stages of interaction between different racial or ethnic groups, including contact, competition, accommodation, and assimilation.

Multiculturalism

A social and political approach that promotes the recognition, inclusion, and support of multiple cultural backgrounds and identities within a society.

Adversarial Cultures

Societal or organizational cultures where conflict, opposition, or competition is encouraged or prevalent.

Self-Perpetuating

A process, organization, or system that has the capability to renew or sustain itself indefinitely without external assistance.