Pineapple Ltd Is Considering Replacing Its Current Stock of Computers

question 57

Multiple Choice

Pineapple Ltd is considering replacing its current stock of computers with a new model.It plans to evaluate three options based on the following information:
Management is considering three options:
(i) Replace the old computers now and operate Model XA for four years,then replace with Model XD and operate for eight years,to be replaced in perpetuity;
(ii) Replace the old computers now and operate Model XXD for 12 years,to be replaced in perpetuity;
(iii) Replace the old computers now and undertake Model XA for three times its estimated life.
Which option should management choose?

• A)Option (i).
• B)Option (ii).
• C)Option (iii).
• D)Indifferent between options (i)and (ii).

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Definitions:

Drill Down

An investigative process that involves breaking down information into more detailed and specific parts to gain deeper understanding.

Avatar

A graphical representation of a user or the user's alter ego or character, often used in virtual environments and online communities.

Tech Talk

An informal presentation or lecture focused on technological topics, trends, or innovations.

Underperformance

Failing to meet expected or standard levels of productivity, achievement, or results.