Which brand is more economically viable on the basis of a present worth analysis over a 7 year period at an interest rate of 12% per year?
Which brand is more economically viable on the basis of a present worth analysis over a 7 year period at an interest rate of 12% per year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In a sugar refinery company, a group of professionals consists of 3 mechanical engineers and 1 accountant are planning to buy a new car for company. Two car brands to be finalized are Bime and Tocam. For Bime, the price is RM 260K now, with regular service RM 800 yearly. After 7 years the salvage value will turn into half of its price. For Tocam, the price is RM 170K now. It has to be regularly serviced with cost of RM1800 yearly. The salvage value 7 years from now is RM 70K. Which brand is more economically viable on the basis of a present worth analysis over a 7 year period at an interest rate of 12% per year?.
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