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You and your partner have become very interested in crosscountry motorcycle racing and wish to purchase entrylevel equipment. You have identied two alternative sets of
You and your partner have become very interested in crosscountry motorcycle racing and wish to purchase entrylevel equipment. You have identied two alternative sets of equipment and gear. Package K has a first cost of $200,000, an operating cost of $4,500 per quarter, and a salvage value of $30,000 after its 2year life. Package L has a rst cost of $270,000 with a lower operating cost of $2,600 per quarter and an estimated $15,000 salvage value after its 4year life- Which package offers the lower present worth analysis at an interest rate of 16% per year, compounded quarterly? The present worth of package K is $ and that of package L is $ . (Click to select} v offers the lower present worth
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