19) In a replacement decision analysis, a Defender (existing equipment) is replaced for a Challenger (new equipment) if: A) The Avengers defeat the Challenger B) The marginal cost of keeping the defender one more year is greater than the Economic Life of the Challenger C) The Challenger's minimum rate of return is greater than that of the Defender. D) Both B and C. 20) The MACRS, or Modified Accelerated Cost Recovery System is: A) A method to depreciate assets for tax purposes B) The name of the new vehicle of the Avengers C) A method to estimate inflation D) The internal rate of return of a project which has a cool name 21) In benefit-cost analysis, the benefit cost ratio BC(i) is defined as the ratio of the present value of all benefits at an interest rate i, and the present value of all costs plus investments at an interest rate. Which of the following is true about the BC evaluation in projects? A) A project should be accepted if BC(i) >1, benefits exceed costs B) A project should be rejected if BC(i) < 1, costs exceed benefits C) None of the above. D) Both A and B are true

19) In a replacement decision analysis, a Defender (existing equipment) is replaced for a Challenger (new equipment) if: A) The Avengers defeat the Challenger B) The marginal cost of keeping the defender one more year is greater than the Economic Life of the Challenger C) The Challenger's minimum rate of return is greater than that of the Defender. D) Both B and C. 20) The MACRS, or Modified Accelerated Cost Recovery System is: A) A method to depreciate assets for tax purposes B) The name of the new vehicle of the Avengers C) A method to estimate inflation D) The internal rate of return of a project which has a cool name 21) In benefit-cost analysis, the benefit cost ratio BC(i) is defined as the ratio of the present value of all benefits at an interest rate i, and the present value of all costs plus investments at an interest rate. Which of the following is true about the BC evaluation in projects? A) A project should be accepted if BC(i) >1, benefits exceed costs B) A project should be rejected if BC(i) < 1, costs exceed benefits C) None of the above. D) Both A and B are true

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 5E

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