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You have to purchase a furnace for your factory. Easy Heart furnace cost $4,000 to purchase. The cost to run the furnaces is $1800 per
You have to purchase a furnace for your factory. Easy Heart furnace cost $4,000 to purchase. The cost to run the furnaces is $1800 per year. Easy Heat furnaces last for a useful life of 5 years. Hot Heat furnaces cost $6,000 to purchase. The cost to run the furnaces is $1,000 per year. Hot Heat furnaces last 10 years. Both furnaces are depreciated straight line to a salvage value of zero over their useful lives. The tax rate is 10%. The discount rate is 18%. Which furnace should be purchased?
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