The New Deep-Frying System Installed in Roger's Deli Is Exactly

question 18

Multiple Choice

The new deep-frying system installed in Roger's Deli is exactly like the old one except that it uses less electricity-$10 less electricity per day when compared to the old fryer.Assume that there are 21 workdays per month when the fryer is in use.Which of the following is the most accurate estimate of the payback period for the $1,500 investment in the new fryer?

• A) A little more than seven months
• B) A little less than six years
• C) A little over 9.5 years
• D) 12.5 years
• E) None of the above

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Definitions:

Auto Transmission

An automatic transmission is a type of motor vehicle transmission that can automatically change gear ratios as the vehicle moves, freeing the driver from having to manually shift gears.

Moral Hazard

The situation where one party engages in risky behavior knowing that it is protected against the consequences of that behavior, often because another party will bear those consequences.

Asymmetric Information

A situation where one party in a transaction has more or superior information compared to another, often leading to an imbalance in the transaction.

Product Reviews

Evaluations or assessments of a product's performance, quality, and usefulness, typically written by consumers or experts.