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Problem 14 (2 points): YYY inc. needs to decide which kind of equipment to use in the production. Cheaper but less reliable equipment costs $100,000;
Problem 14 (2 points): YYY inc. needs to decide which kind of equipment to use in the production. Cheaper but less reliable equipment costs $100,000; requires annual maintenance costs of $20,000 per year and must be replaced every 4 years. A more expensive equipment costs $180,000; requires only a single maintenance at t=3 with the costs of $80,000 and needs to be replaced every 7 years. Which equipment YYY needs to buy and why if the appropriate cost of capital (discount rate) is 10%
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