Business, 21.02.2020 01:30 lilbopeep21

Mr. Smith at Acme Production, Inc. is trying to determine the true economic value (TEV) for a new computerized machine. This machine costs $20 per hour to operate and can be used for a year before it needs to be replaced. A system crash costs $500,000, and the probability that the machine will crash is 5%. The next-best alternative has a price of $150,000. It can also be used for a year and costs $15 per hour to operate. The cost of a system crash for this alternative is also $500,000, and the probability that it will crash is 15%. Acme plans to operate this machine 8 hours per day, 365 days, over the next year. The true economic value (TEV) of the machine is: $185,400. $175,000. $154,000. $210,400.

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Mr. Smith at Acme Production, Inc. is trying to determine the true economic value (TEV) for a new co...

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