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34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000

34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000
Transcribed Image Text:34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000
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