Question
A small contracting company can be purchased for 70,000, which will give annual receipts for the next 20 years of 36,332 with annual disbursements of
A small contracting company can be purchased for 70,000, which will give annual receipts for the next 20 years of 36,332 with annual disbursements of 28,110. alternatively, another contracting company (XXX contractor) can be purchased for 85,000, which will give annual receipts for the next 20 years of 40,984 with annual disbursements of 31,000. the salvage values at the end of 20 years are assumed to be zero. the purchasers intends to acquire only one of these contractors. if her minimum required rate of return is 10% which contractor should she purchase? Use present worth method.
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