You Are Evaluating Two Different Machines

question 78

Multiple Choice

You are evaluating two different machines.Machine A costs $25,000,has a five-year life,and has an annual OCF (after tax) of −$6,000 per year.Machine B costs $30,000,has a seven-year life,and has an annual OCF (after tax) of −$5,500 per year.If your discount rate is 10 percent,using EAC which machine would you choose?

• A) Machine A
• B) Machine B
• C) Both machines A and B
• D) Neither machine A nor B

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Definitions:

Paul Ekman

A psychologist known for his work on the facial expressions and emotions, and the co-discoverer of microexpressions.

Facial Expressions

Visible changes in the face that convey emotions, intentions, or social information to others.

Emotions

Complex psychological states that involve three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response.

William James

William James was an influential American psychologist and philosopher known for his contributions to functionalism and pragmatism, as well as his work on the psychology of habit.