Tony's Pizzaria, owned by my cousin Tony (True!), is looking for a new pizza oven (Not really). Two alternatives are: Model 1: Cost $30,000, estimated life 10 years, Salvage value $4,000, annual income $9,400, annual expenses $5,000 Model 2: Cost $40,000, estimated life 5 years, Salvage $2000, annual income $13,000, annual expenses $ $3,000 Find the discounted payback period for each if MARR is 6%. If their criterion is minimum DPBP, which should they buy?

Tony's Pizzaria, owned by my cousin Tony (True!), is looking for a new pizza oven (Not really). Two alternatives are: Model 1: Cost $30,000, estimated life 10 years, Salvage value $4,000, annual income $9,400, annual expenses $5,000 Model 2: Cost $40,000, estimated life 5 years, Salvage $2000, annual income $13,000, annual expenses $ $3,000 Find the discounted payback period for each if MARR is 6%. If their criterion is minimum DPBP, which should they buy?

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

Section: Chapter Questions

Problem 1PS

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