The General Hospital is evaluating new office equipment offered by four companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use a Present Worth analysis to determine which company you should purchase the equipment from. First cost Maintenance and operating cost (annual) Annual benefit Salvage value Company A Company B Company C $15,000 $18,000 $25,000 $1,600 $1,100 $400 $8,000 $3,000 Buy the equipment from Select one: O Company A O Company B O Company C O Company D O Don't select any company $9,000 $3,500 $13,000 $6,000 Company D $20,000 $900 $11,000 $4,500
The General Hospital is evaluating new office equipment offered by four companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use a Present Worth analysis to determine which company you should purchase the equipment from. First cost Maintenance and operating cost (annual) Annual benefit Salvage value Company A Company B Company C $15,000 $18,000 $25,000 $1,600 $1,100 $400 $8,000 $3,000 Buy the equipment from Select one: O Company A O Company B O Company C O Company D O Don't select any company $9,000 $3,500 $13,000 $6,000 Company D $20,000 $900 $11,000 $4,500
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The General Hospital is evaluating new office equipment offered by four companies.
In each case the interest rate is 15% and the useful life of the equipment is 4 years.
Use a Present Worth analysis to determine which company you should purchase the
equipment from.
First cost
Maintenance
and operating
cost (annual)
Annual benefit
Salvage value
Company A Company B Company C Company D
$15,000
$18,000
$25,000
$20,000
$1,600
$1,100
$400
$900
$8,000
$3,000
Buy the equipment from
Select one:
O Company A
O Company B
Company C
O Company D
O Don't select any company
$9,000
$3,500
$13,000
$6,000
$11,000
$4,500
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