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Blue Cat Paving has owned a BAA BAA sheepsfoot roller for 4 years. They plan to keep it for another 2 years. However, a sales
Blue Cat Paving has owned a BAA BAA sheepsfoot roller for years. They plan to keep it for another years. However, a sales representative from Overdrive Machinery has approached the company trying to convince them to purchase a new EWE roller to replace it arguing that the annual costs will be lower. This machine could be expected to have a life of years. After surveying the industry Blue Cat Paving has found another potential option. The RAM also has lower annual costs than the current machine. However, it has an expected lifetime of only years. tableBAA BAA,EWERAMCost when new dollars year market value dollars year market value dollars year market value dollars year market value dollars year market value dollarsNA year market value dollarsNAAnnual costs dollarsExpected life years What are the comparison costs for each machine if the company uses a discount rate of : Note: your answers below should be negative, since the benefits of the machines are not included. Answer to the nearest dollar Cost per year for BAA BAA Cost per year for EWE Cost per year for RAM Which is the preferred option? Keep the BAA BAA Replace with EWE Replace with RAM
Blue Cat Paving has owned a BAA BAA sheepsfoot roller for years. They plan to keep it for another years. However, a sales representative from Overdrive Machinery has approached the company trying to convince them to purchase a new EWE roller to replace it arguing that the annual costs will be lower. This machine could be expected to have a life of years.
After surveying the industry Blue Cat Paving has found another potential option. The RAM also has lower annual costs than the current machine. However, it has an expected lifetime of only years.
tableBAA BAA,EWERAMCost when new dollars year market value dollars year market value dollars year market value dollars year market value dollars year market value dollarsNA year market value dollarsNAAnnual costs dollarsExpected life years
What are the comparison costs for each machine if the company uses a discount rate of :
Note: your answers below should be negative, since the benefits of the machines are not included.
Answer to the nearest dollar
Cost per year for BAA BAA
Cost per year for EWE
Cost per year for RAM
Which is the preferred option?
Keep the BAA BAA
Replace with EWE
Replace with RAM
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