**Gateway Tours Decision on Bus Models**Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain, but lasts two years longer than the other. Gateway’s discount rate is 9%. It plans to continue with one of the two models for the foreseeable future. Based on the equivalent annual costs of each, shown below, which should it choose?[Note: I have tried to make it easier for you to solve this problem. You do not need to do extra, unnecessary calculations merely to show me your work.]| Model | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 ||-------|--------|--------|--------|--------|--------|--------|--------|| Old R | $0 | -$29 | -$29 | -$29 | -$29 | -$29 | -$29 || S & S | $0 | -$27 | -$27 | -$27 | -$27 | -$27 | |**Which bus should Gateway Tours choose, and why?**Give me the name of the bus that should be chosen, and the final numbers that justify your answer. Your answer must take the form: "Choose ______________ because $___________ is better than $________."

As per the given information: Discount rate - 9% To determine: Determination as to which model…

Answered: -$29 -$27 -$29 -$27 Tours choose, and…

Business

Finance

-$29 -$27 -$29 -$27 Tours choose, and why? is that should he chosen -$29 -$27 -$ hosen and the final r

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

Problem 1PS

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Dundar Mifflin is considering the purchase of new printer and have narrowed down the possibilities to two models which perform equally well. However, the method of paying for the two models is different. Model A requires $8,000 per year payment for the next five years. Model B requires the following payment schedule. Payment (Model 2) $10,000 9,000 Year 1 2 8,000 5,000 4 3,000 1. Which model should you buy assuming 12% rate?
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k You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Kia Rio, which will cost $17,000 to purchase and which will have OCF of -$1,800 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $25,000 to purchase and which will have OCF of -$950 annually throughout that vehicle's expected 4-year life. Both cars will be worthless at the end of their life. If you intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future. If the business has a cost of capital of 12 percent, calculate the EAC. Note: Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations. Round your answers to 2 decimal places. EAC Rio EAC Prius Which one should you choose?
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can explain step by step, TQ Suppose a proposed new road to be constructed in North Carolina between Raleigh and Morehead City will lower the average cost per trip by car from $5 to $4. Currently, 500,000 trips are made between the two cities per year. An estimate indicates that, all other things being equal, the new road will increase the number of trips per year to 600,000. Calculate the annual benefits to motorists of the new road as based on their willingness to pay.
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