Question
You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs
You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $9,400 and is expected to run for 6 years; model B is more expensive, with a price of $15,300 and has an expected life of 10 years. The annual maintenance costs are $850 for model A and $750 for model B. Assume that the opportunity cost of capital is 10 percent. Calculate EAC for both the models and choose which one should you buy? Can I please have the step by step process on how to arrive to the correct answer please
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