A big industrial firm is interested in evaluating the potential purchase of a machine.In order to do this,managers should look at ___________.

Question

Quizplus · Accepted Answer

The actual purchase price is just one consideration in determining the real cost of a purchase. Maintenance and operating costs, repair charges, and supplies are all costs associated with ownership that can vary across product choices. These costs are then evaluated against the stated life of the product. This is important as some products with a higher initial price actually cost less over time because of the product's longer life. Financial analysis also evaluates the time it takes to break even on the investment. A company considering new equipment designed to lower manufacturing costs will want to know how long it will take to recoup the investment given the projected savings.

A Big Industrial Firm Is Interested in Evaluating the Potential