Question
A choice will be made between two pumps to be bought in a factory. The initial cost of the M pump is 500000 TL, its
A choice will be made between two pumps to be bought in a factory. The initial cost of the M pump is 500000 TL, its service life is 12 years and its scrap value is 120000 TL. Operation and repair expenses are 80000 lira for the first year, and 25000 lira every year. The first cost of the K pump is 750000 tl, service life is 15 years, scrap value is 250000 lira. Operation and repair expenses are 50000 TL in the first year and increase by 25% every year. Taxes and other overhead costs are 60000 lira more each year for the K pump than for the M pump. Which pump would you recommend if the capital cost is 40%.
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