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A Company Needs to Buy a Machine to Produce Widgets

Question 30

Multiple Choice

A company needs to buy a machine to produce widgets and the annual interest rate is 9%.They have narrowed their choices to the following 3 machines:
Machine X - annual cost = $4,005
Machine Y - capitalized cost = $49,970,produces 10% more widgets per year than machine X
Machine Z - capitalized cost = $40,900,produces 10% fewer widgets per year than machine X
From a financial point of view,which machine should the company buy?


A) X
B) Y
C) Z
D) Cannot be determined

Correct Answer:

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