If Two Machines Produce the Same Product but Have Different

question 26

Multiple Choice

If two machines produce the same product but have different lives,you should choose the machine with the:

• A) highest IRR.
• B) longest life.
• C) lowest equivalent annual cost.
• D) highest NPV, discounted at the opportunity cost of capital.

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Definitions:

Economic Sector

A segment of the economy that encompasses businesses and organizations sharing similar activities, products, or services.

Service Sector

The segment of the economy that involves providing intangible goods or services to consumers and businesses, such as healthcare, education, and banking.

Jobs

Specific tasks or pieces of work to be done, often for payment.