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Paul has the option of purchasing a warehouse storage system for $50,000 today from Supplies, Inc. Another vendor, AAA Industrial, offers the same storage system
Paul has the option of purchasing a warehouse storage system for $50,000 today from Supplies, Inc. Another vendor, AAA Industrial, offers the same storage system for $75,000, but doesn't require any payment until the system's warranty period ends after 5 years. Use present worth analysis to determine which vendor should be selected if Paul's cost of capital is 8% and the required return is 4%. Inflation is 3% per year. Paul wants to consider inflation in the analysis. Note: the only cash flow diagram required in your solution is for AAA Industrial
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