Assume your firm has an unused machine that originally cost $90 000, has a book value of $40 000 right now, and can be sold right now for $20 000 Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: Select one: O a. $50 000 O b. $20 000 O c. $90 000 d. $40 000

Assume your firm has an unused machine that originally cost $90 000, has a book value of $40 000 right now, and can be sold right now for $20 000 Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: Select one: O a. $50 000 O b. $20 000 O c. $90 000 d. $40 000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following two mutually exclusive alternatives: (a) Determine the IRR on the incremental investment in the amount of$2,000.(b) If the firm's MARR is 10%, which alternative is the better choice?
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