Question
Faced with the impossibility of importing aluminum, a brewery is considering installing a can recycling center. The alternative that Alcan sells has an initial cost
Faced with the impossibility of importing aluminum, a brewery is considering installing a can recycling center. The alternative that Alcan sells has an initial cost of BsF. 1,600,000 and its operation would cost BsF 70,000 per Mimestre while its rescale value would be BsF. 400,000 after 2 years of life. The alternative that Alcea sells has an initial cost of BeF. 2,100,000, a quarterly operating cost of BsF. 50,000 and a salvage value of BsF 260,000 after 4 years of life. Which process should be chosen using the present value criterion, with an interest rate of 8% per year, compounded quarterly?
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