You decide to purchase some equipment for your business. You have have two alternative payment plans in
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Question:
You decide to purchase some equipment for your business. You have have two alternative payment plans in which you pay for the equipment at a later date. Alternative A has a 1.6% annual cost of capital and you will owe $528 in 5 years. Alternative B has a 8.5% annual cost of capital and you will owe $571 in 13 years.
What is the present value of the alternative that you should choose (Round to the nearest cent)?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: