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Office Automation is obliged to choose between two copiers: A and B. The economic lives of these copiers are different. The costs and maintenance expenses
Office Automation is obliged to choose between two copiers: A and B. The economic lives of these copiers are different. The costs and maintenance expenses of these copiers are given below in real terms. The nominal discount rate is 14.0% , and the inflation rate is 5.0%. Which copier should the company choose? Ignore taxes and depreciation. The costs and maintenance expenses in real terms for Copier A are: 1600 in Year 0, 300 in Year 1, 300 in Year 2, 300 in Year 3, 300 in Year 4, 300 in Year 5, 300 in Year 6, and 300 in Year 7. The costs and maintenance expenses in real terms for Copier B are: 1000 in Year 0, 600 in Year 1, 600 in Year 2, 600 in Year 3, and 600 in Year 4. Copier A Copier B Neither Copier A nor Copier B Copier A or Copier B
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