1. Consider the following alternatives: First cost 5000 10,000 Annual Maintenance 500 200 End-of-useful-life salvage value 600 1000 Useful life 5 years 15 years Based on an 8% interest rate, which alternative should be selected? Use: a) Rate of return Analysis b) Future Worth analysis.

1. Consider the following alternatives: First cost 5000 10,000 Annual Maintenance 500 200 End-of-useful-life salvage value 600 1000 Useful life 5 years 15 years Based on an 8% interest rate, which alternative should be selected? Use: a) Rate of return Analysis b) Future Worth analysis.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. Consider the following alternatives:
First cost
5000
10,000
Annual Maintenance
500
200
End-of-useful-life salvage value
600
1000
Useful life
5 years
15 years
Based on an 8% interest rate, which alternative should be selected? Use:
a) Rate of return Analysis
b) Future Worth analysis.

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