You Are Looking to Replace an Old Machine X with a New

question 14

Multiple Choice

You are looking to replace an old machine X with a new machine Y.
The two machines,X and Y,which perform the same functions,have the following costs and lives.
PV Costs Life
Machine X $10,000 5
Machine Y $11,500 7
Which machine would you choose? Assume an opportunity cost of capital of 15%.

• A) Keep the old machine X.
• B) Buy the new machine Y.
• C) Indifferent

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Definitions:

Transgenic Plants

Plants that have been genetically modified to contain and express genes from other species.

Cell Wall

A rigid layer that lies outside the cell membrane of plants, fungi, and bacteria, providing structural support and protection.

Human Genome Project

an international scientific research project with the goal of determining the sequence of nucleotide base pairs that make up human DNA, and of identifying and mapping all of the genes of the human genome.

Repeated Sequences

DNA segments that are present multiple times within a genome, including both tandem repeats and interspersed repeats.