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Crash Realty must choose between two copiers, the 4GX and the 5GQ. The 4GX costs $6000 and will last for four (4) years. The copier
Crash Realty must choose between two copiers, the 4GX and the 5GQ. The 4GX costs $6000 and will last for four (4) years. The copier will require a real aftertax cost of $600 per year including all relevant expenses. The 5GQ costs $8000 and will last six (6) years; its real aftertax cost will be $500 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 2 percent per year, and the nominal discount rate is 5 percent. Which copier should the company choose?
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