When a Business Is Considering Whether to Replace Old Equipment

question 115

True/False

When a business is considering whether to replace old equipment with newer equipment, the replacement cost of the old equipment, compared to the cost of the new equipment, is relevant information to the business decision.

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Definitions:

Condorcet Paradox

A situation in social choice theory where collective preferences can be cyclic (not transitive) despite the transitive preferences of individual voters.

Majority Rule

A decision-making principle where the preferences or decisions supported by more than half of the participants are adopted.

Transitive Preferences

A condition in decision-making where if an individual prefers option A over option B and prefers option B over option C, then the individual also prefers option A over option C.

Median voter theorem

A theory suggesting that the outcome of a majority rule voting system will represent the preferences of the median voter.