Question
A business needs an air conditioning compressor to use for 10 years. Using present value analysis and an interest rate of 3% compounded per year
A business needs an air conditioning compressor to use for 10 years. Using present value analysis and an interest rate of 3% compounded per year decide which is the best alternative.
Alternative A Alternative B
Initial cost 1000 1500
Annual maintenance cost 60 100
Useful life (years) 5 10
Residual value 200 300
Calculate Present worth value and evaluate the best alternative
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
