The LJB Company must replace a freezer and is trying to decide between two alternatives: The LJB

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The LJB Company must replace a freezer and is trying to decide between two alternatives:

The LJB Company's cost of capital is 8 percent.
Which investment provides LJB with the lowest total cost?

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Entrepreneurial Finance

ISBN: 978-0133140514

6th edition

Authors: Philip J. Adelman; Alan M. Marks

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Question Posted: Jul 31, 2015 09:05 AM

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The LJB Company must replace a freezer and is trying to decide between two alternatives: The LJB

Question:

Item Freezer A Freezer B Investment required Annual electrical bill ($29,000) (3,000) 6,000 ($25,000) (4,000) 5,000 Salvage value Project life in years 11 11

Step by Step Answer:

Freezer A has the lower total cost of 4784370 Item Investment require...View the full answer

Entrepreneurial Finance

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