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:

Erikson

Erik Erikson was a psychologist known for his theory on the psychosocial development of humans, emphasizing the impact of society and culture on personality development across eight stages.

Generativity

Generativity refers to the concern for establishing and guiding the next generation, which is typically expressed through parenting, teaching, mentoring, and other creative contributions.

Stagnation

A period of growth halt or decline, characterized by lack of development, progress, or change.

Emotional Difficulties

Emotional difficulties refer to disturbances in one’s ability to experience, express, or manage a range of emotions, often impacting daily functioning and well-being.