You Are Evaluating Two Different Machines

question 121

Multiple Choice

You are evaluating two different machines.Machine A costs $10,000,has a five-year life,and has an annual OCF (after tax) of −$2,500 per year.Machine B costs $15,000,has a seven-year life,and has an annual OCF (after tax) of −$2,000 per year.If your discount rate is 14 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:

Improved

To have become better or more advanced in quality or condition.

Dependent Variable

In an experiment, it is the variable that is being tested and measured, expected to change as a result of manipulations to the independent variable.

Memorizing Poetry

The act of committing poems to memory for the purpose of internalizing its content, structure, and expressive qualities.

Dependent Variable

In scientific research, the variable being tested and measured, which is expected to change as a result of manipulations to the independent variable.