Question
The Coshocton Orchestra needs to purchase new sound boards before its upcoming summer park series. In the past, the Orchestra has always bought its equipment
The Coshocton Orchestra needs to purchase new sound boards before its upcoming summer park series. In the past, the Orchestra has always bought its equipment from Glass Music, a local vendor. Glass Music will offer the Orchestra a special deal of $12,000 for the sound equipment, plus $2500 a year for basic maintenance over the ten-year life of the boards. Zanesville Sound is trying to expand its regional customer base, and offers the Orchestra the sound boards for $18,000, plus $1500 a year for basic maintenance over the eight-year life of the equipment. The Orchestra uses a 7% cost of capital rate. From which company should the Coshocton Orchestra buy its sound equipment? Support your answer by showing all of your calculations.
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