Rocko Inc. has a machine with a book value of $50,000 and a five-year remaining life. A new machine is available at a cost of $85,000 and Rocko can also receive $38,000 for trading in the old machine. The new machine will reduce variable manufacturing costs by $14,000 per year over its five-year life. Should the machine be replaced?
A. No, because the company will be $23,000 worse off in total.
B. No, because the income will decrease by $14,000 per year.
C. Rocko will be not be better or worse off by replacing the machine.
D. Yes, because income will increase by $14,000 per year.
E. Yes, because income will increase by $23,000 in total.
Answer: E
You might also like to view...
According to ________, people measure outcomes such as pay in terms of their inputs.
A. retributive justice theory B. progressive justice theory C. equity theory D. economic theory E. expectancy theory
Define and discuss outsourcing
Which of the following is FALSE about persuasive communication?
a. It is the ability to influence others to accept your point of view. b. It often involves manipulating someone into taking the action favored by the communicator. c. It involves the honest presentation of information. d. It is the organized presentation of information on which a person can choose to act.
NOT among the reasons that Wegmans Food Markets delivers above-average profit margins and has below-average employee turnover rates in comparison to its supermarket industry rivals is
A. multimillion dollar investments in the training and education of its employees. B. rewards and benefits substantially lower than supermarket industry averages in order to boost profit margins. C. a regular series of programs designed to "hear," capture, and implement employees' ideas. D. its recruitment and staffing policy of filling at least half of its open opportunities internally. E. company events such as "open-door" days, team huddles, focus groups, and two-way Q&As with senior management.