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Cullumber Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $83,000 and is
Cullumber Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $83,000 and is expected to last 10 years, and the second system costs $86,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.)
System 1 | System 2 | |||
---|---|---|---|---|
Equivalent annual cost | $enter a dollar amount rounded to 2 decimal places | $enter a dollar amount rounded to 2 decimal places |
Which air-conditioning system should Cullumber purchase? Cullumber should purchase the select a system second systemfirst system.
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