A salesman from vendor A, who is trying to get his foot in the door at Filerbee, Inc., offered water desalting equipment for $2.1 million. This is $400,000 more than the price that a saleswoman from vendor B offered, if purchased and paid for now. However, as a special offer, vendor A said Filerbee won’t have to pay until the warranty runs out. If the equipmenthas a 2-year warranty, determine which offer is better. The company’s real MARR is 12% per year and the inflation rate is 4% per year.
A salesman from vendor A, who is trying to get his foot in the door at Filerbee, Inc., offered water desalting equipment for $2.1 million. This is $400,000 more than the price that a saleswoman from vendor B offered, if purchased and paid for now. However, as a special offer, vendor A said Filerbee won’t have to pay until the warranty runs out. If the equipmenthas a 2-year warranty, determine which offer is better. The company’s real MARR is 12% per year and the inflation rate is 4% per year.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A salesman from vendor A, who is trying to get his foot in the door at Filerbee, Inc., offered water desalting equipment for $2.1 million. This is $400,000 more than the price that a saleswoman from vendor B offered, if purchased and paid for now. However, as a special offer, vendor A said Filerbee won’t have to pay until the warranty runs out. If the equipment
has a 2-year warranty, determine which offer is better. The company’s real MARR is 12% per year and the inflation rate is 4% per year.
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