Question
A large manufacturing firm can procure one equipment item from two suppliers -firm (A) and firm (B). Approximately 100,000 unites of the equipment are need.
A large manufacturing firm can procure one equipment item from two suppliers -firm (A) and firm (B). Approximately 100,000 unites of the equipment are need. Estimates for vendors A and B are given for each unit.
Firm A Firm B Initial
Cost -18,000 -23,000
Annual Cost -13,500 -4,600
Annual income 15,000 6,000
Salvage value 2000 3,000
Life span 15 10
Use the rate of return method to determine which vendor should be selected.
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
1259307417, 978-1260153132, 1260153134, 978-1259307416
