You Are Considering the Purchase of a New Machine

Multiple Choice

You are considering the purchase of a new machine. Your analysis includes the evaluation of two machines that have differing initial and ongoing costs and differing lives. Whichever machine is purchased will be replaced at the end of its useful life. You should select the machine that has the:

A) longest life.
B) highest annual operating cost.
C) lowest annual operating cost.
D) highest equivalent annual cost.
E) lowest equivalent annual cost.