Question
I can see that Freezer A is the Lowest total cost, but I'm having trouble getting my numbers right in excel can someone please break
I can see that Freezer A is the Lowest total cost, but I'm having trouble getting my numbers right in excel can someone please break this down step by step for me?
The LJB Company must replace a freezer and is trying to decide between two alternatives:
Freezer A Freezer B
Investment required $29,000 $25,000
Annual electric bill $3,000 $4,000
Salvage value $6,000 $5,000
Project Life 11 years 11 years
The LJB Companys cost of capital is 8 percent.
Which investment provides LJB with the lowest total cost? Why?
(Use present values for your calculations).
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