Management of Modugno Corporation Is Considering Whether to Purchase a New

question 78

Multiple Choice

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $441,000 or a new model 240 machine costing $387,000 to replace a machine that was purchased 7 years ago for $429,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.
Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.
Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $387,000 in the new machine, the money could be invested in a project that would return a total of $430,000.
-In making the decision to buy the model 240 machine rather than the model 370 machine,the differential cost was:

• A)$12,000
• B)$1,000
• C)$54,000
• D)$42,000

---

Definitions:

Voluntary Euthanasia

The act of ending a person's life by their request, typically to relieve them from incurable diseases or unbearable suffering.

Elisabeth Kübler-Ross

A psychiatrist known for her work on the five stages of grief, which describe the progression of emotions experienced by terminally ill patients.

Dying

The process of coming to the end of life, resulting in the cessation of all biological functions that sustain a living organism.

Coping

Coping refers to the strategies and mechanisms that individuals employ to manage stress, challenges, or adversity in order to maintain psychological well-being.