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10. Wisconsin-based Fancy Restaurant Ltd. is considering buying new set of serving ware. The cash outlays of the two sets the restaurant's owner is looking
10. Wisconsin-based Fancy Restaurant Ltd. is considering buying new set of serving ware. The cash outlays of the two sets the restaurant's owner is looking at are shown below along with net revenue expected with each set. If the cost of capital is 10%, which of the two sets should the owner choose and why? Year 0 1 2 3 Set 1 -10,000 4,000 5.000 6,000 7,000 8,000 Set 2 -7,000 8,000 8,500 9,000 4 5 A. Set 1 because they last longer. B. Set 1 because the EAA is lower. C. Set 2 because the EAA is higher. D. Set 2 because the initial outlay is less
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