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Solve using the Present Value and Annual Equivalent Cost methods. Select the best purchase option. Economically evaluate the following set of equipment offerings to
Solve using the Present Value and Annual Equivalent Cost methods. Select the best purchase option. Economically evaluate the following set of equipment offerings to determine the option that optimizes the purchasing process using the present value method for the purchase of assets. Consider that the purchase of the equipment will be financed at a cost of capital of 28%. Machine A Machine B Machine C Present Value $60,000 $40,000 $54,000 Operating Annual Cost $5,000 $4,000 $4,500 Rescue Value 15% of P 20% of P 15% of P Service Life 24 12
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