Kamil Koç Transportation is considering two models of buses for newly opened routes. Bus Model 1 will have a first cost of $160912, an operating cost of $21338 per year, and a resale value of $86231 after 6 years. Bus Model 2 will have a first cost of $108347, an operating cost of $15486 per year, and also have a $75850 resale value, but after 4 years. At an interest rate of 7% per year, which model should the Kamil Koç buy based on an annual worth analysis? What is the annual worth and the present worth of the selected alternative? Select one: a. Bus Model 1 is selected, AW is $-25017 and PW is $–102936 b. Bus Model 2 is selected, AW is $– 30390 and PW is $-30390 C. Bus Model 1 is selected, AW is $-25017 and PW is $–205161 d. Bus Model 2 is selected, AW is $-33123 and PW is $-102936 e. Bus Model 2 is selected, AW is $-33123 and PW is $–205161

Kamil Koç Transportation is considering two models of buses for newly opened routes. Bus Model 1 will have a first cost of $160912, an operating cost of $21338 per year, and a resale value of $86231 after 6 years. Bus Model 2 will have a first cost of $108347, an operating cost of $15486 per year, and also have a $75850 resale value, but after 4 years. At an interest rate of 7% per year, which model should the Kamil Koç buy based on an annual worth analysis? What is the annual worth and the present worth of the selected alternative? Select one: a. Bus Model 1 is selected, AW is $-25017 and PW is $–102936 b. Bus Model 2 is selected, AW is $– 30390 and PW is $-30390 C. Bus Model 1 is selected, AW is $-25017 and PW is $–205161 d. Bus Model 2 is selected, AW is $-33123 and PW is $-102936 e. Bus Model 2 is selected, AW is $-33123 and PW is $–205161

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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