Suppose a Dairy Farmer Is Considering the Purchase of an Additional

Multiple Choice

Suppose a dairy farmer is considering the purchase of an additional milking machine at a price of $5000.She expects the discounted MRP of the machine in Year 1 to be $1700,in Year 2 to be $1500 and in Year 3 to be $1200,after which the machine has no value.The farmer should

A) buy the machine because its present value is $600 more than its purchase price.
B) buy the machine because its marginal revenue is $600 more than its marginal cost.
C) be indifferent about the purchase because its present value is approximately equal to its purchase price.
D) not buy the machine because its purchase price is $600 less than its present value.
E) not buy the machine because its present value is $600 less than its purchase price.