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Jason is considering the purchase of a new vacuum cleaner. There are two electric models. Both models would save him a quarter of an hour
Jason is considering the purchase of a new vacuum cleaner. There are two electric models. Both models would save him a quarter of an hour of time a week. The lower-quality vacuum would last three years and would cost $300; the higher-quality model would last eight years and cost $400. The purchase of either model would be funded from existing savings. Jason earns $15 an hour after tax in his job. His required rate of return based on what he could earn in the market is 6 percent after tax. Should he make the investment? If so, which one should he buy? Express all figures on an annual basis
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