31. Gateway Tours is choosing between two bus models. One is more expensive to pur- chase and...

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31. Gateway Tours is choosing between two bus models. One is more expensive to pur- chase and maintain, but lasts much longer than the other. Its discount rate is 11%. It plans to continue with one of the two models for the foreseeable future; which should it choose? Based on the costs of each model shown below, which should it choose? Model 0 1 2 3 4 5... 7 Old Reliable -200 -4 -4 -4 -4 -4... -4 Short and Sweet -100 -2 -2 -2

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Fundamentals Of Corporate Finance

ISBN: 9781292018409

3rd Global Edition

Authors: Berk, Peter DeMarzo, Jarrad Harford

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