Downtown Abbey Corp. wants to buy a new sheep - shearing machine. It has narrowed down the

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Downtown Abbey Corp. wants to buy a new sheep

-

shearing machine. It has narrowed down the choice to two machines that can do the job equally well:

Machine name The Shearilizer Naked Sheep

Purchase price $10, 000 20, 000$

Useful life $($ years $) 4 5$

Maintenance cost $($ end of each year $) 6, 000 3, 000$

The relevant discount rate is $10 % .$ There are no taxes.

What is the net present value of all costs associated with the Shearilizer $($ in absolute terms $) ?$

What is the equivalent annual cost for the Shearilizer $($ in absolute terms $) ?$

What is the equivalent annual cost for the Naked Sheep $($ in absolute terms $) ?$

Posted Date: May 11, 2024 05:17 AM

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