Which of the Following Machines Has the Lowest User Cost

question 47

Multiple Choice

Which of the following machines has the lowest user cost? Machine A costs $15,000 and depreciates at a 25% rate,machine B costs $10,000 and depreciates at a rate of 20%,machine C costs $20,000 and depreciates at a rate of 10%,and machine D costs $17,000 and depreciates at a rate of 11%.The expected real interest rate is 5%.

• A)Machine A
• B)Machine B
• C)Machine C
• D)Machine D

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Definitions:

Nonspendable

Funds not available for spending because they are legally or contractually required to remain intact.

Committed

In finance, "committed" refers to a pledge or firm agreement to execute a financial transaction or investment.

Assigned

Allocated or designated to a particular task, position, or purpose.

Unassigned

Refers to funds, resources, or tasks not specifically allocated or designated for a particular purpose or to a particular entity.