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

question 2

Multiple Choice

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

Neurons

Basic working units of the brain, specialized cells designed to transmit information to other nerve cells, muscle, or gland cells.

Ganglions

Refers to swellings or cysts that commonly develop along the tendons or joints of the wrists or hands, often filled with a jelly-like fluid.

Adrenal Glands

Small glands located above the kidneys that produce a variety of hormones, including adrenaline and cortisol, which regulate metabolism, immune system, blood pressure, and response to stress.

Kidneys

Vital organs in the urinary system responsible for filtering waste from the blood, regulating electrolyte balance, and maintaining fluid balance.