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Office Automation, Inc. must choose between two copiers the XX40 or the RH45. The XX40 costs $1,500 and will last for 3 years. The copier
Office Automation, Inc. must choose between two copiers the XX40 or the RH45. The XX40 costs $1,500 and will last for 3 years. The copier will require a real aftertax cost of $120 per year after all relevant expenses. The RH45 costs $2,300 and will lasts 5 years. The real aftertax cost for the RH45 will be $150 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 5 % per year , and the nominal discount rate is 14%. Which copier should the company choose
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