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Bon Terra Resources Inc. wants to purchase a new tunnel boring machine (TBM). There are three options, with the following information. The discount rate is
Bon Terra Resources Inc. wants to purchase a new tunnel boring machine (TBM). There are three options, with the following information. The discount rate is 12%. (20 points out of 100) Using EAC criteria, which one Bon Terra should buy? If Bon Terra needs the TBM machine for 6 years, what is the best purchasing policy? (Note that, a TBM machine should be replaced with new one after its useful life.)
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