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My washing machine broke. I have 2 possible brands to buy A and B. Use present value analysis to choose the best alternative. I use
My washing machine broke. I have 2 possible brands to buy A and B. Use present value analysis to choose the best alternative. I use an interest rate of 3% compounded per year to evaluate my investments because it is what I earn on the money I have invested. I plan to need a washing machine for 10 years.
Brand A Initial cost 1000 Annual maintenance cost 60 Useful life (years) 5 Residual value 200
Brand B Initial cost 1500 Annual maintenance cost 100 Useful life (years)10 Residual value 300
The present value of alternative A to do the analysis is $ ________ . The present value of alternative B to do the analysis is $ _________ . The selected alternative is _________(AoB).
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