Two options are available for the reroofing of Pinkley Pickles Inc. The first option, a traditional tar and gravel roof, costs $75,000 and has a life of 15 years. The second option, a neoprene membrane roof, costs $85,000 and has a life of 20 years. The company expects to occupy the building for 50 years. Using an interest rate of 5% and annual worth analysis, which roof should be chosen?
Two options are available for the reroofing of Pinkley Pickles Inc. The first option, a traditional tar and gravel roof, costs $75,000 and has a life of 15 years. The second option, a neoprene membrane roof, costs $85,000 and has a life of 20 years. The company expects to occupy the building for 50 years. Using an interest rate of 5% and annual worth analysis, which roof should be chosen?
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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Two options are available for the reroofing of Pinkley Pickles Inc. The first option, a traditional tar and gravel roof, costs $75,000 and has a life of 15 years. The second option, a neoprene membrane roof, costs $85,000 and has a life of 20 years. The company expects to occupy the building for 50 years. Using an interest rate of 5% and annual worth analysis, which roof should be chosen?
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