Question: Magenta Ltd is deciding whether to purchase a high-quality printer or one of lesser quality. The high-quality printer costs $25 000 and should last four

Magenta Ltd is deciding whether to purchase a high-quality printer or one of lesser quality. The high-quality printer costs $25 000 and should last four years. The lesser quality printer costs $15 000 and should last three years. If the cost of capital for the company is 10 per cent.

What is the equivalent annual cost for the best choice for the company?

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