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

question 20

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 equivalent annual costs.
• D)the depreciation tax shield approach.
• E)the replacement cost approach.

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Definitions:

Implied Warranty

An unwritten guarantee that the product or service being sold is fit for its intended purpose.

Express Warranty

A promise or guarantee made by a seller about the quality, function, or performance of a product, explicitly stated in the contract or sales agreement.

Fitness For Purpose

A condition ensuring that a product or service meets the specific criteria or intended use defined by the buyer or contract.

Market Share Theory

A concept in business and economics referring to the percentage of an industry or market's total sales that is earned by a particular company over a specified time period.