Mr.Andi plans to purchase a new printing machine. He has already received the offering from two printing vendors with the detailed quotation below. Vendor-1 Vendor-2 23.000.000 Initial Cost (IDR) Operation and Maintenance cost, (IDR/year) Salvage value (IDR) Life (years) -20.000.000 -8.500.000 1.000.000 6 -8.100.000 2.000.000 Assuming that Mr.Andi considers the MARR 10% per year, the business is expected to be eighteen years in service: (a) Based on a basis PW calculation, determine which vendor is expected to be considered by Mr.Andi. (b) All printing machines have a lifetime limitation of five years. Considering this situation, Mr. Andi has a standard practice of evaluating all options in line with that period. Assume that the salvage values are not expected to change, and If Mr.Andi uses a study period as exactly that period, which vendor should be chosen by Mr.Andi?

Mr.Andi plans to purchase a new printing machine. He has already received the offering from two printing vendors with the detailed quotation below. Vendor-1 Vendor-2 23.000.000 Initial Cost (IDR) Operation and Maintenance cost, (IDR/year) Salvage value (IDR) Life (years) -20.000.000 -8.500.000 1.000.000 6 -8.100.000 2.000.000 Assuming that Mr.Andi considers the MARR 10% per year, the business is expected to be eighteen years in service: (a) Based on a basis PW calculation, determine which vendor is expected to be considered by Mr.Andi. (b) All printing machines have a lifetime limitation of five years. Considering this situation, Mr. Andi has a standard practice of evaluating all options in line with that period. Assume that the salvage values are not expected to change, and If Mr.Andi uses a study period as exactly that period, which vendor should be chosen by Mr.Andi?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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