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A cleaning services firm is considering two brands of industrial vacuum cleaners to equip their staff. Option A will cost $15,800, require servicing of $2000
A cleaning services firm is considering two brands of industrial vacuum cleaners to equip their staff.
Option A will cost $15,800, require servicing of $2000 per year, and it will last five years.
Option B will cost $10,000, require servicing of $1000 per year, and it will last three years.
If the cost of capital is 8%, which is the better option, given that the firm has an ongoing requirement for vacuum cleaners?
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