Question
Peter owns a printing business and is considering buying a new printing press. There are 2 choices of printing machines offered by a seller, namely:
Peter owns a printing business and is considering buying a new printing press. There are 2 choices of printing machines offered by a seller, namely: - Press machines made in Thailand of 110 million with an estimated lifespan of 3 years with maintenance costs of 30 million per year. - Press machine made in China costs 150 million with an economic age of 4 years and maintenance costs of 40 million per year.
The two machines will be depreciated in a straight line and are thought to have a salvage value of 5 million. Bang Kosal's business has a target return of 15% and a tax burden of 30%. Which printing press should Peter choose?
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