Projects with different lives: You are starting a family pizza parlor and need to buy a motorcycle

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Projects with different lives: You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $9,000 and is expected to run for 6 years; Model B is more expensive, with a price of $14,000, and has an expected life of 10 years. The annual maintenance costs are $800 for Model A and $700 for Model B. Assume that the opportunity cost of capital is 10 percent. Which one should you buy?

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Fundamentals Of Corporate Finance

ISBN: 9781119795438

5th Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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