An electric utility company is taking bids on the purchase, installation, and operation of microwave towers: Which
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Which is the most economical bid if the interest rate is 11%? Both towers will have no salvage value after 20 years of use.
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Cost per Tower Bid B Bid A $65,000 $58,000 Equipment cost $15,000 $20,000 Installation cost Annual maintenance and inspection fee $1,000 $1,250 $500 Annual extra income taxes 35 years Life 40 years $0 Salvage value $0
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Since either tower will have no salvage value after 20 years we may select the anal...View the full answer
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