Question
A company needs to purchase a new copy machine and has the following information available for Model A and Model B: Purchase Price A $45,000
A company needs to purchase a new copy machine and has the following information available for Model A and Model B: Purchase Price A $45,000 B $55,000 Shipping $600 $600 Installation $250 $350 Monthly Service $65 $15 Monthly Toner $250 $250 Annual Maintenance $750 $650 Copies per Minute 35 85 Initial Training Cost $500 $500 The expected life of both machines is five years. The current copy machine has the following information: Purchase Price of the Old Copier $30,000 Book Value of the Old Copier $2,500 Trade-in Value $3,500 What is the total relevant cost of machine A that should be used in the decision to purchase machine A or machine B?
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