QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years. Company Company Company A B C $15,000 $25,000 $20,000 First cost Maintenance and operating 1,600 8,000 900 Annual benefit 13,000 9,000 Salvage value 3,000 6,000 4,500 (a) Construct a choice table for interest rates from 0% to 100%. (b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis. 400

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
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Solve A and B. Don’t use excel
QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years.
Company Company Company
A
B
C
$15,000 $25,000 $20,000
400
900
Annual benefit
13,000
9,000
Salvage value
3,000
6,000
4,500
(a) Construct a choice table for interest rates from 0% to 100%.
(b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis.
First cost
Maintenance and operating 1,600
8,000
Transcribed Image Text:QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years. Company Company Company A B C $15,000 $25,000 $20,000 400 900 Annual benefit 13,000 9,000 Salvage value 3,000 6,000 4,500 (a) Construct a choice table for interest rates from 0% to 100%. (b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis. First cost Maintenance and operating 1,600 8,000
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