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Company B is considering two front-end loader alternatives. Loader 1 has the initial purchase price of $110,000, annual profit of $37,000, and salvage value of
Company B is considering two front-end loader alternatives. Loader 1 has the initial purchase price of $110,000, annual profit of $37,000, and salvage value of $10,000 at the end of 5 year useful life, while Loader 2 has the initial purchase price of $130,000, annual profit of $44,000, and salvage value of $13,000. The expected MARR is 20%. What is the incremental net present value of comparing Loader 1 to Loader 2, and which alternative is better?
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