Question
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain, but lasts two years longer than the other. Gateways
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain, but lasts two years longer than the other. Gateways discount rate is 9%. It plans to continue with one of the two models for the foreseeable future. Based on the equivalent annual costs of each, shown below, which should it choose? [Note: I have tried to make it easier for you to solve this problem. You do not need to do extra, unnecessary calculations merely to show me your work.] Model Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Old R $0-$29-$29-$29-$29-$29-$29 S & S $0-$28-$28-$28-$28 Which bus should Gateway Tours choose, and why? Give me the name of the bus that should be chosen, and the final numbers that justify your answer.Your answer must take the form: "Choose _______________ because $____________ is better than $_________."
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