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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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