2. Palm Springs Water Company is considering purchasing new filters for its water treatmer plant. Three options are available to choose from. The information is given in the table below: Filter Filter Filter Model A Model B Model C Initial Cost, P 32,000 25,000 36,000 Net Cash flow per year, P/year 6,800 5,500 7,200 Salvage Value 2,000 1000 3000 Life, year 6 Which filter model should you recommend and why? Explain your answer.
2. Palm Springs Water Company is considering purchasing new filters for its water treatmer plant. Three options are available to choose from. The information is given in the table below: Filter Filter Filter Model A Model B Model C Initial Cost, P 32,000 25,000 36,000 Net Cash flow per year, P/year 6,800 5,500 7,200 Salvage Value 2,000 1000 3000 Life, year 6 Which filter model should you recommend and why? Explain your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:2. Palm Springs Water Company is considering purchasing new filters for its water treatment
plant. Three options are available to choose from. The information is given in the table
below:
Filter
Filter
Filter
Model A
Model B
Model C
Initial Cost, P
32,000
25,000
36,000
Net Cash flow per year, P/year
6,800
5,500
7,200
Salvage Value
2,000
1000
3000
Life, year
6
Which filter model should you recommend and why? Explain your answer.
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