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QUUr decision with only relevant numbers. Problem 15 Marita Lo desires to purchase a new front office computer system for her Lo Motel (LOMO). After considerable discussion with purveyors, she has narrowed her choices to systems sold by ABC Company and XYZ Computers. The system proposed by each company is expected to have a useful life of seven years. She believes the alternative systems are equívalent for providing services required by the LOMO; therefore, her focus is cost. The associated costs 0000 of each system are as follows: 334 Chapter 6 ABC XYZ 000.C db Computers Co. 002. 000 $25,000 $30,000 Initial cost Annual costs: 25,000 25,000 Labor 1,000 800 Utilities ips 2,000 2,000 Supplies Requred 3,000 2,500 Maintenance 1. Salvage value (in 7 years) 5,000 8,000 Required: molls rbee kat amoom 1. Which costs are irrelevant? 2. Which system should Marita purchase? (Ignore the time value of money.) Support your decision with numbers.

QUUr decision with only relevant numbers. Problem 15 Marita Lo desires to purchase a new front office computer system for her Lo Motel (LOMO). After considerable discussion with purveyors, she has narrowed her choices to systems sold by ABC Company and XYZ Computers. The system proposed by each company is expected to have a useful life of seven years. She believes the alternative systems are equívalent for providing services required by the LOMO; therefore, her focus is cost. The associated costs 0000 of each system are as follows: 334 Chapter 6 ABC XYZ 000.C db Computers Co. 002. 000 $25,000 $30,000 Initial cost Annual costs: 25,000 25,000 Labor 1,000 800 Utilities ips 2,000 2,000 Supplies Requred 3,000 2,500 Maintenance 1. Salvage value (in 7 years) 5,000 8,000 Required: molls rbee kat amoom 1. Which costs are irrelevant? 2. Which system should Marita purchase? (Ignore the time value of money.) Support your decision with numbers.

FINANCIAL ACCOUNTING
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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QUUr decision with only relevant numbers. Problem 15 Marita Lo desires to purchase a new front office computer system for her Lo Motel (LOMO). After considerable discussion with purveyors, she has narrowed her choices to systems sold by ABC Company and XYZ Computers. The system proposed by each company is expected to have a useful life of seven years. She believes the alternative systems are equívalent for providing services required by the LOMO; therefore, her focus is cost. The associated costs 0000 of each system are as follows:
Transcribed Image Text:QUUr decision with only relevant numbers. Problem 15 Marita Lo desires to purchase a new front office computer system for her Lo Motel (LOMO). After considerable discussion with purveyors, she has narrowed her choices to systems sold by ABC Company and XYZ Computers. The system proposed by each company is expected to have a useful life of seven years. She believes the alternative systems are equívalent for providing services required by the LOMO; therefore, her focus is cost. The associated costs 0000 of each system are as follows:
334 Chapter 6 ABC XYZ 000.C db Computers Co. 002. 000 $25,000 $30,000 Initial cost Annual costs: 25,000 25,000 Labor 1,000 800 Utilities ips 2,000 2,000 Supplies Requred 3,000 2,500 Maintenance 1. Salvage value (in 7 years) 5,000 8,000 Required: molls rbee kat amoom 1. Which costs are irrelevant? 2. Which system should Marita purchase? (Ignore the time value of money.) Support your decision with numbers.
Transcribed Image Text:334 Chapter 6 ABC XYZ 000.C db Computers Co. 002. 000 $25,000 $30,000 Initial cost Annual costs: 25,000 25,000 Labor 1,000 800 Utilities ips 2,000 2,000 Supplies Requred 3,000 2,500 Maintenance 1. Salvage value (in 7 years) 5,000 8,000 Required: molls rbee kat amoom 1. Which costs are irrelevant? 2. Which system should Marita purchase? (Ignore the time value of money.) Support your decision with numbers.
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