2. Given the cash flow diagram below, answer the questions by marking on correct HOY 1 2 ← $19,500 $175,000 4 1.D $36,000 the $122,000 8 1. What is the initial cost of this new machine? 1.A $122,000 1.B $19,500 4$36,000 9 1.C $175,000 answer.
2. Given the cash flow diagram below, answer the questions by marking on correct HOY 1 2 ← $19,500 $175,000 4 1.D $36,000 the $122,000 8 1. What is the initial cost of this new machine? 1.A $122,000 1.B $19,500 4$36,000 9 1.C $175,000 answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question

Transcribed Image Text:2. Given the cash flow diagram below, answer the questions by
marking
on
correct
$36,000
ΕΟΥ 1
2
$175,000
← $19,500
3
1.D $36,000
6
the
$122,000
8
9
1. What is the initial cost of this new machine?
1.A $122,000
1.B $19,500
1.C $175,000
answer.
Expert Solution

Step 1
The initial cost of an asset/machine/project is the cost incurred at time zero. The initial cost is also known as the first cost. The first cost or initial cost includes purchasing cost, installation cost any other cost which is incurred to put the asset/machine into use.
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