If the used car market is a "lemons" market, how would you expect the repair record of used cars that are sold to compare with the repair record of those not sold? A. Since in a "lemons" market more low-quality cars are sold, we would expect the repair record of cars sold to be worse than cars not sold. B. Since in a "lemons" market more high-quality cars are sold, we would expect the repair record of cars sold to be better than cars not sold. C. Since in a "lemons" market only low-quality cars are offered for sale, no cars will be sold and thus the market collapses. D. Since in a "lemons" market only low-quality cars are sold, consumers will only purchase cars with good repair records.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51