Exhibit 13-5 Exhibit 13-5 Shows Data on the Various

Exhibit 13-5 Exhibit 13-5 shows data on the various dough-mixing machines that a donut shop is considering buying.Assume that any dough-mixing machine is expected to last indefinitely, that operating expenses are negligible, and that the price of donuts is expected to remain constant in the future.If the interest rate is 8 percent and the firm has $3, 000 on hand, what should it do?

A) Buy the machine with the three-quart bowl, which costs $3, 000.
B) Save $3, 000 at the interest rate of 8 percent.
C) Buy the machine with the one-quart bowl and save the extra $2, 000.
D) Buy the machine with the two-quart bowl and save the extra $1, 000.
E) Buy two machines, with one-quart and two-quart bowls.