Two Machines,A and B,which Perform the Same Functions,have the Following

question 17

Multiple Choice

Two machines,A and B,which perform the same functions,have the following costs and lives. $$\begin{array} { c r r } \text { Type } & \text { PV Costs } & \text { Life } \\\text { Machine A } & \$ 6000 & 5 \\\text { Machine B } & \$ 8000 & 7\end{array}$$
Which machine would you choose? The two machines are mutually exclusive and the cost of capital is 15%.

• A)Machine A because the EAC is $1789.89
• B)Machine B because the EAC is $1922.88
• C)Machine A because it has lower PV costs
• D)Machine B beca

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Definitions:

Original Owners

The first owners or proprietors of an asset or property.

New Crankshaft

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Used cars that were once registered and are now on the market for purchase, typically at a reduced cost compared to brand-new vehicles.

Marginal Products

The additional output obtained by employing one more unit of a certain input while keeping other inputs constant.