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 $9,500 and is expected to run for 6 years; model B is more expensive, with a price of $15,800 and has an expected life of 10 years. The annual maintenance costs are $830 for model A and $750 for model B. Assume that the opportunity cost of capital is 11 percent. Calculate EAC for both the models and choose which one should you buy? (Round intermediate calculations and final answers to 2 decimal places, e.g. 15
The EAC of Model A is $
The EAC of Model B is $
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