Question
(Equivalent annual annuity) Rib & Wings-R-Us is considering the purchase of a new smoker oven for cooking barbecue, ribs, and wings. It is looking at
(Equivalent annual annuity) Rib & Wings-R-Us is considering the purchase of a new smoker oven for cooking barbecue, ribs, and wings. It is looking at two different ovens. The first is a relatively standard smoker and would cost $ 49000, last for 8 years, and produce annual cash flows of $ 17000 per year. The alternative is the deluxe, award-winning Smoke-alator, which costs $ 80000 and, because of its patented humidity control, produces the "moistest, tastiest barbecue in the world." The Smoke-alator would last for 13 years and produce cash flows of $ 24000 per year. Assuming a required rate of return of 12 percent on both projects, compute their equivalent annual annuities (EAAs).
The EAA of the standard smoker is ???(round to the nearest dollar)
The EAA of the smoke-alator is ?? (round to the nearest dollar)
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