Question
.The Dessert Company must replace a freezer and is trying to decide between two alternatives, their cost of capital is 10% and the project life
.The Dessert Company must replace a freezer and is trying to decide between two alternatives, their cost of capital is 10% and the project life is 12 years: (50 points)
|
| Freezer A | PV Factor | Present Value | Freezer B | Present Value |
| Investment Required | $14,500 |
|
| $12,800 |
|
| Annual Electrical Bill | $1,900 |
|
| $2400 |
|
| Salvage value | $4,000 |
|
| $3,000 |
|
| Total Cost for 12 years |
|
|
|
|
|
Which investment provides LJB with the lowest total cost?
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Finance Theory And Practice
Authors: Anne Marie Ward
4th Edition
191235036X, 978-1912350360
