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.

---

Definitions:

Missing Value

A term used in statistics and data analysis to denote a data point that is not recorded or is unknown.

Calculate

To determine the amount or number of something by mathematical means.

Simple Interest Rate

An interest rate calculation method where the interest is computed solely on the principal amount, without compounding.

September

The ninth month of the year in the Gregorian calendar, often associated with the beginning of the academic year in many countries.