In one group, find a local business, such as a copy shop, that rents time on desktop

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In one group, find a local business, such as a copy shop, that rents time on desktop computers for an hourly rate. Determine the hourly rate. In the other group, determine the price of a mid-range desktop computer at www.dell.com. Combine this information from the two groups and perform a capital budgeting analysis. Assume that one student will use the computer for 40 hours per semester for the next three years. Also assume that the minimum rate of return is 10%. In performing your analysis, use the present value factor for 5% compounded for six semiannual periods of 5.08 Does your analysis support the student purchasing the computer?

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...
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Accounting

ISBN: 9780538475006

24th Edition

Authors: Carl S Warren, James M Reeve, Jonathan Duchac

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