A Machine Costs $10,000,has No Scrap Value at the End

question 27

Multiple Choice

A machine costs $10,000,has no scrap value at the end of 10 year estimated lifetime.Maintenance is $500 per year.How much can be spent on increasing the machine's productivity by 50%,if the salvage value remain same? If this is done,the annual maintenance cost would increase to $800 per year and the machine's lifetime would decrease to 8 years.The cost of capital is j₁ = 10%.

• A)$2757
• B)$5909
• C)$4790
• D)$6536

---

Definitions:

Human Body

The physical structure of a human being, encompassing the skeletal, muscular, circulatory, and numerous other systems.

Asmat

A group of people living in the Papua region of Indonesia, known for their woodcarving and other artworks.

Moai

Large, blocky figural stone sculptures found on Rapa Nui (Easter Island) in Polynesia.

Rapa Nui

An island in the southeastern Pacific Ocean, known for its monumental statues called moai, created by the early Rapa Nui people.