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Your company is looking at purchasing a front-end loader and has narrowed the choice down to two loaders. Loader 1 costs $150,000 with a useful
Your company is looking at purchasing a front-end loader and has narrowed the choice down to two loaders. Loader 1 costs $150,000 with a useful life of six years with a salvage value of $10,000 at the end of the sixth year. Loader 2 costs $110,000 with a useful life of four years with a salvage value of $10,000 at the end of the fourth year. The annual profit for either one is $20,000. Using a MARR of 20%, which alternative should your company buy? Use the payback period to support your decision.
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