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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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2 Which is more economical, a tile floor or a wood floor? Assume that the public building has a life of 50 years, no salvage value, and either floor will last the 50 years with proper maintenance. Both floors cost $1500 per year for cleaning and waxing. The interest rate is 4%. The tile floor will cost $35,000 to install. The wood floor will cost $25,000 to install. The wood floor must be refinished every 5 years for $6000. (Answer: Tile floor saves $602 per year.) Please help solve
Transcribed Image Text:2 Which is more economical, a tile floor or a wood floor? Assume that the public building has a life of 50 years, no salvage value, and either floor will last the 50 years with proper maintenance. Both floors cost $1500 per year for cleaning and waxing. The interest rate is 4%. The tile floor will cost $35,000 to install. The wood floor will cost $25,000 to install. The wood floor must be refinished every 5 years for $6000. (Answer: Tile floor saves $602 per year.) Please help solve
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