a year. John's Workshop electric bills are Ș He wants to reduce them by using solar electricity, so he gets two quotes from solar panel manufacturers. The cost of GOTO Panels is $2,000 and the seller tells him that his electricity cost will be reduced to $250 per year. The GOTO Panels have a life of 10 years with a salvage value of 25% of the original price. Another solar company called SFB quotes that their solar panels will cost $4000 but will reduce the cost of electricity to $50 per year. SFB's panels have a life of 20 years and a salvage value of 50% the original price. Use present worth and the least common multiple of the service lives, to determine which company you should go with. MARR is 10%.
a year. John's Workshop electric bills are Ș He wants to reduce them by using solar electricity, so he gets two quotes from solar panel manufacturers. The cost of GOTO Panels is $2,000 and the seller tells him that his electricity cost will be reduced to $250 per year. The GOTO Panels have a life of 10 years with a salvage value of 25% of the original price. Another solar company called SFB quotes that their solar panels will cost $4000 but will reduce the cost of electricity to $50 per year. SFB's panels have a life of 20 years and a salvage value of 50% the original price. Use present worth and the least common multiple of the service lives, to determine which company you should go with. MARR is 10%.
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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Transcribed Image Text:John's workshop electric bills are $ 1000 a year.
He wants to reduce them by using solar
electricity, so he gets two quotes from solar
panel manufacturers. The cost of GOTO Panels
is $2,000 and the seller tells him that his
electricity cost will be reduced to $250 per year.
The GOTO Panels have a life of 10 years with a
salvage value of 25% of the original price.
Another solar company called SFB quotes that
their solar panels will cost $4000 but will reduce
the cost of electricity to $50 per year. SFB's
panels have a life of 20 years and a salvage
value of 50% the original price. Use present
worth and the least common multiple of the
service lives, to determine which company you
should go with. MARR is 10%.
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