Blossom Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $76,000 and is expected to last 10 years, and the second system costs $87,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.) System 1 System 2 Equivalent annual cost $ $ Which air-conditioning system should Blossom purchase? Blossom should purchase the
Blossom Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $76,000 and is expected to last 10 years, and the second system costs $87,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.) System 1 System 2 Equivalent annual cost $ $ Which air-conditioning system should Blossom purchase? Blossom should purchase the
Chapter1: Financial Statements And Business Decisions
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Blossom Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $76,000 and is expected to last 10 years, and the second system costs $87,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.) System 1 System 2 Equivalent annual cost $ $ Which air-conditioning system should Blossom purchase? Blossom should purchase the eTextbook and Media
Transcribed Image Text:Blossom Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first
system costs $76,000 and is expected to last 10 years, and the second system costs $87,000 and is expected to last 15 years. Assume
that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.)
Equivalent annual cost
EA
$
System 1
$
+A
System 2
Which air-conditioning system should Blossom purchase?
Blossom should purchase the
eTextbook and Media
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