Question: You have been asked to evaluate to air purity control devices the signature device cost $150 to set up and $75 per year to operate
You have been asked to evaluate 2 air purity control devices. The "Signature" device costs $150 to set up and $75 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. The "Classic" device costs $350 to set up and $45 per year to operate. It lasts for 4 years and has no salvage value. Assuming that this control equipment is replaced as it wears out, which device do you recommend and why if the cost of capital is 12%? The Classic, its EAC is $114.35. The Classic, its EAC is $160.23. The Classic, its EAC is $105.56. The Signature, its EAC is $137.45. The Signature, its EAC is $486.68
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