Question
An office prints 200,000 pages per year. The Dell brand printers costs $1100 and will produce a total of 600,000 copies before it wears out
An office prints 200,000 pages per year. The Dell brand printers costs $1100 and will produce a total of 600,000 copies before it wears out (3 year life). The Cannon brand machine costs $1,800 and will produce 1,000,000 copies in its 5 year life. Maintenance and material costs are $.05 a page for the Dell machine and $.03 with Cannon machine. The Dell machine has a salvage value of $150 and the Cannon machine will have a salvage value of $225. The required return is 8 percent a year. Which machine should the company acquire? Show numbers and assume year-end cash flows for simplicity.
Net present value for Dell copier_____________ Equivalent annuity for Dell copier_________
Net present value for Cannon copier____________ Equivalent annuity for Cannon copier_________
Which copier should be chosen? _______________
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started