Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification
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Question:
Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $ million. The system will last years. DoItRight sells a sturdier but more expensive system for $ million; it will last for years. Both systems entail $ million in operating costs; both will be depreciated straightline to a final value of zero over their useful lives; neither will have any salvage value at the end of its life. The firms tax rate is and the discount rate is
What is the equivalent annual cost of investing in the cheap system?
Note: Do not round intermediate calculations. Enter your answer as a positive value. Enter your answer in millions rounded to decimal places.
What is the equivalent annual cost of investing in the more expensive system?
Note: Do not round intermediate calculations. Enter your answer as a positive value. Enter your answer in millions rounded to decimal places.
Which system should Blooper install?
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