Use the Following to Answer Questions

question 138

Multiple Choice

Use the following to answer questions :
A car rental company charges a flat fee of $21.50 and an hourly charge of $14.50. This means that cost is a function of the hours the car is rented plus the flat fee.
-Determine how long the car was rented if the bill came to $152.00.

• A) 9 hours
• B) 10 hours
• C) 11 hours
• D) 12 hours

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Definitions:

Stand-Alone Principle

A method of evaluating investment projects as if they were the only project the company is undertaking, assessing their viability on their individual merits.

Depreciation Tax Shield

The reduction in income tax that results from the allowance for depreciation, which can be considered a non-cash expense that decreases taxable income.

Equivalent Annual Cost

Equivalent annual cost is a financial analysis tool used to compare the cost effectiveness of different projects or investments with differing lifespans by calculating their equivalent cost per year.

EAC

Equivalent Annual Cost, a financial analysis tool used to compare the cost effectiveness of different investments or projects over their lifecycles.