Question: 12. You can continue to use your less efficient machine with a maintenance cost of $7,191 annually for the next five years (with zero initial
12. You can continue to use your less efficient machine with a maintenance cost of $7,191 annually for the next five years (with zero initial cost). Alternatively, you can purchase a more efficient machine for $12,000 today, plus $5,000 annual maintenance that last for the next 10 years. The cost of capital is 15%, then you should: (assume both machines are repeatable) A. Keep the old machine and save $200 in equivalent annual costs. B. Keep the old machine and save $388 in equivalent annual costs. C. Keep the old machine and save $1,195 in equivalent annual costs. D. Buy the new machine and save $109 in equivalent annual costs. E. Buy the new machine and save$389 in equivalent annual cost
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