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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Solve it correctly please. I will rate.
Transcribed Image Text:A company has asked to you help them select anew
backhoe. You have a choice between a wheel-mounted
version, which costs $50,000 and has an expected life
of 5 years and salvage value of $2000, and a
track-mounted one, which costs $80,000, with a 5-year
life and an expected salvage value of $10,000. Both
machines will achieve the same productivity. MARR is
8% per year. Which one will you recommend?
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