Two refrigerators are available for purchase. One costs more to buy but less to operate as shown below. Both are expected to last 10 years. 3. Refrigerator A $840 Refrigerator B $700 Purchase Price: Annual Operating Cost (in each year): $100 $120 Which is the cheaper source of refrigeration over a ten-year period? Does the prevailing interest rate affect your answer? (Hint: calculate the answer using 3% and again using 12%.)

Two refrigerators are available for purchase. One costs more to buy but less to operate as shown below. Both are expected to last 10 years. 3. Refrigerator A $840 Refrigerator B $700 Purchase Price: Annual Operating Cost (in each year): $100 $120 Which is the cheaper source of refrigeration over a ten-year period? Does the prevailing interest rate affect your answer? (Hint: calculate the answer using 3% and again using 12%.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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