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MMLU-Pro / 293 / The Dickenson Company has purchased a hand-operated machine of the following…

Problem

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question

The Dickenson Company has purchased a hand-operated machine of the following description; after a year, it can purchase an automatic machine of equal capacity and sell the first machine for 1,600.Thefollowingdataisavailable:Hand−OperatedMachineAutomaticMachinePurchaseprice1,600. The following data is available: Hand-Operated Machine Automatic Machine Purchase price 4,400 6,200ExpectedUsefullife5years4yearsExpectedsalvagevalue6,200 Expected Useful life 5 years 4 years Expected salvage value 0 0Annualoperatingcosts0 Annual operating costs 2,600 $800 The current interest rate is 8%. Which of the following options should the company chose? Option A - Keep the hand-operated machine 5 years. Option B - Keep the hand-operated machine 1 year, sell it, and purchase the automatic to use for 4 years. Round all calculations to the nearest dollar.
Plain-text mathematical notation (without MathML)
The Dickenson Company has purchased a hand-operated machine of the following description; after a year, it can purchase an automatic machine of equal capacity and sell the first machine for 1,600.Thefollowingdataisavailable:Hand−OperatedMachineAutomaticMachinePurchaseprice4,400 6,200ExpectedUsefullife5years4yearsExpectedsalvagevalue0 0Annualoperatingcosts2,600 $800 The current interest rate is 8%. Which of the following options should the company chose? Option A - Keep the hand-operated machine 5 years. Option B - Keep the hand-operated machine 1 year, sell it, and purchase the automatic to use for 4 years. Round all calculations to the nearest dollar.
Original LaTeX notation
The Dickenson Company has purchased a hand-operated machine of the following description; after a year, it can purchase an automatic machine of equal capacity and sell the first machine for $1,600. The following data is available: Hand-Operated Machine Automatic Machine Purchase price $4,400 $6,200 Expected Useful life 5 years 4 years Expected salvage value $0 $0 Annual operating costs $2,600 $800 The current interest rate is 8%. Which of the following options should the company chose? Option A - Keep the hand-operated machine 5 years. Option B - Keep the hand-operated machine 1 year, sell it, and purchase the automatic to use for 4 years. Round all calculations to the nearest dollar.

category

business

options

  1. Neither options
  2. Keep the hand-operated machine for 4 years, then switch to the automatic machine for 1 year
  3. Purchase the automatic machine immediately without selling the hand-operated machine
  4. Option B
  5. Keep the hand-operated machine for 3 years, then switch to the automatic machine for 2 years
  6. Keep the hand-operated machine for 2 years, then switch to the automatic machine for the remaining 3 years
  7. Option A, but negotiate a higher salvage value for the hand-operated machine after 5 years
  8. Option B, but seek a lower purchase price for the automatic machine
  9. Option A
  10. Both options

src

stemez-Business

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Source and history

upstream_id / Original problem ID
293
task_id
1af8b61e-200e-5390-b663-ab74f07deebf
task_key
default--test--293
task_revision_id
1
config / split
default / test

Official source

initial import