The Cold City Public Works department (CCPW) is choosing the manufacturer for a new fleet of snow plows. They are considering plows made by We Move Snow Corporation (WMSC) and also plows made by Snow Throwing Equipment of America (STEA). The WMSC plows cost more to buy initially, but they cost less to maintain each year, and are expected to last for 10 years. The STEA plows are less expensive to buy, but they cost more to maintain each year, and only last for 6 years. The cash flows related to each of the choices are presented.

If the CCPW's cost of capital is 8 percent, which company's plows should they buy?

Answer rating: 100% (QA)

To determine which companys plows the Cold City Public Works department CCPW should buy we need to c... View the full answer