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The Borstal Company is considering the purchase two machines that do the same job but have different lives. The two machines have the following costs
- The Borstal Company is considering the purchase two machines that do the same job but have different lives. The two machines have the following costs in real terms.
|
Unit |
Initial Cost | Annual Maintenance Cost |
Expected Life |
| A | $40,000 | $10,000 | 3 years |
| B | $50,000 | $8,000 | 4 years |
Which unit should Borstal buy? The real cost of capital is 6% and ignore taxes.
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Principles Of Investments
Authors: Alan Marcus, Zvi Bodie, Michael Drew, Anup Basu, Alex Kane
1st Edition
0071012389, 978-0071012386
