Toni's Tools Is Comparing Machines to Determine Which One to Purchase.The

question 41

Multiple Choice

Toni's Tools is comparing machines to determine which one to purchase.The machines sell for differing prices,have differing operating costs,differing machine lives,and will be replaced when worn out.These machines should be compared using:

• A)net present value only.
• B)both net present value and the internal rate of return.
• C)their effective annual costs.
• D)the depreciation tax shield approach.
• E)the replacement parts approach.

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Definitions:

Revenues

Aggregate income produced from the core activities of a business, mainly through the sale of goods and services.

Expenses

The outflow of money or other resources from a person or company to pay for goods or services.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue and expenses to show net income or loss.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.