A Manager Is Considering Investing in a New Machine That

question 13

Multiple Choice

A manager is considering investing in a new machine that costs $2.5 million.He identifies four uncertain variables: sales,fixed costs,advertising costs and the life of the new machine.The required rate of return is 15% p.a.Given the following information,determine which variable is most sensitive to changes or errors:

• A)Sales.
• B)Fixed costs.
• C)Advertising costs.
• D)Life of machine.

---

Definitions:

Neural Connections

The links between neurons in the brain and nervous system that are formed through synapses, allowing for communication and signal transmission.

Susceptible

Likely to be influenced or harmed by a particular thing or condition.

Flu

An infectious viral illness that affects the respiratory system, characterized by fever, cough, and muscle aches.

Erikson

Refers to Erik Erikson, a psychologist known for his theory on psychosocial development that outlines eight stages from infancy to adulthood, each characterized by a central conflict.