Question

You are trying to choose a new siding for your house. A salesman offers you two choices:
a. Wood siding, which will last 10 years and cost $5,000 to install and $1,000/year to maintain.
b. Aluminum siding, which will last forever, cost $15,000 to install, and will have a lower maintenance cost per year.
If your discount rate is 10%, how low would your maintenance costs on the aluminum siding have to be for you to choose the aluminum siding?


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  • CreatedApril 15, 2015
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