B-18 QZY, Inc. is evaluating new wi A offered by three companies. Company Compan A B First cost $15,000 1,600 $25,000 Maintenance 400 and operating 8,000 3,000 4 Annual benefit 13,000 Salvage value Useful life, in vears 6,000 4
B-18 QZY, Inc. is evaluating new wi A offered by three companies. Company Compan A B First cost $15,000 1,600 $25,000 Maintenance 400 and operating 8,000 3,000 4 Annual benefit 13,000 Salvage value Useful life, in vears 6,000 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:8-18 QZY, Inc. is evaluating new widget machines
A
A offered by three companies.
Company
Company Company
A
в
First cost
$15,000
$25,000
400
$20,000
Maintenance
and operating
1,600
900
Annual benefit
8,000
3,000
13,000
9,000
Salvage value
Useful life, in years
6,000
4,500
4
4
4
(a) Construct a choice table for interest rates from
0% to 100%.
(b) MARR = 15%. From which company, if any,
should you buy the widget machine? Use rate of
return analysis.
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