Question: The LJB Company must replace a freezer and is trying to decide between two alternatives: The LJB Company's cost of capital is 8 percent. Which

The LJB Company must replace a freezer and is trying to decide between two alternatives:

Item Freezer A Freezer B Investment required Annual electrical bill ($29,000) (3,000)

The LJB Company's cost of capital is 8 percent.
Which investment provides LJB with the lowest total cost?

Item Freezer A Freezer B Investment required Annual electrical bill ($29,000) (3,000) 6,000 ($25,000) (4,000) 5,000 Salvage value Project life in years 11 11

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