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You are considering a maintenance contract from two vendors. Vendor Y charges $80,000 upfront and then $13,000 per year for the three-year life of the
You are considering a maintenance contract from two vendors. Vendor Y charges $80,000 upfront and then $13,000 per year for the three-year life of the contract. Vendor Z charges $100,000 upfront and then $10,000 per year for the two-year life of the contract. Compute the NPV and EAA for each vendor assuming an 9% cost of capital. Which vendor should you choose?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
