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Essentials Of Investments
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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Two alternative means of providing engineering drafting services are under consideration. Handy-Cam $250,000 $115/hr $250/hr $15,000 R-tistry $200,000 $120/hr $250/hr $20,000 Purchase Price Operating Cost Revenue Market value (end of useful life) Useful life 6 years 6 years It is anticipated that the chosen alternative will be used to generate revenue 8 hrs/day, 250 days per year. The company uses a MARR = 12% for all investments. 12% Interest Table For the anticipated annual use of the drafting services, which alternative would you recommend? Remember to show your calculations in your supporting work. O Handy-Cam O R-tistry At what usage of the drafting services (hours/year) would you be indifferent between the two alternatives? Remember to show your calculations in your supporting work. Round your answer to the neares whole hour. Ouection 7 O ntc
Transcribed Image Text:Two alternative means of providing engineering drafting services are under consideration. Handy-Cam $250,000 $115/hr $250/hr $15,000 R-tistry $200,000 $120/hr $250/hr $20,000 Purchase Price Operating Cost Revenue Market value (end of useful life) Useful life 6 years 6 years It is anticipated that the chosen alternative will be used to generate revenue 8 hrs/day, 250 days per year. The company uses a MARR = 12% for all investments. 12% Interest Table For the anticipated annual use of the drafting services, which alternative would you recommend? Remember to show your calculations in your supporting work. O Handy-Cam O R-tistry At what usage of the drafting services (hours/year) would you be indifferent between the two alternatives? Remember to show your calculations in your supporting work. Round your answer to the neares whole hour. Ouection 7 O ntc
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