Question: The table below gives comparative data for the two pieces of equipment A and B. (interest rate = 8%). Equipment A Initial cost $

The table below gives comparative data for the two pieces of equipment

The table below gives comparative data for the two pieces of equipment A and B. (interest rate = 8%). Equipment A Initial cost $ 25 000 Service life 5 years Annual revenue 4500 Salvage value 5000 Compare the two alternatives by using ERR method Present Worth Method Annual cost method (use Capital recovery) I. II. III. Equipment B 40 000 5 years 5500 10000

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a step 1 I ERR method Equipment A ERR 4500 25000 8 25000 0006 06 Equipment B ERR 5500 40000 8 40000 ... View full answer

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