A person plans to purchase a model A equipment for Rp. 31,000,000. Another alternative is a model B for Rp. 35,000,000.- At the end of its economic life (8 years), both tools sell for Rp. 2,500,000,- and Rp. 3,000,000. , Model B's annual operating income is Rp. 16,000,000,- and model A Rp. 14,500,000,- The cost for operation and maintenance per year for model A and model B is Rp. 6,500,000, If i = 15% per year. Which tool to choose?
A person plans to purchase a model A equipment for Rp. 31,000,000. Another alternative is a model B for Rp. 35,000,000.- At the end of its economic life (8 years), both tools sell for Rp. 2,500,000,- and Rp. 3,000,000. , Model B's annual operating income is Rp. 16,000,000,- and model A Rp. 14,500,000,- The cost for operation and maintenance per year for model A and model B is Rp. 6,500,000, If i = 15% per year. Which tool to choose?
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section10.A: Mutually Exclusive Investments Having Unequal Lives
Problem 2P
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A person plans to purchase a model A equipment for Rp. 31,000,000. Another alternative is a model B for Rp. 35,000,000.- At the end of its economic life (8 years), both tools sell for Rp. 2,500,000,- and Rp. 3,000,000. , Model B's annual operating income is Rp. 16,000,000,- and model A Rp. 14,500,000,- The cost for operation and maintenance per year for model A and model B is Rp. 6,500,000, If i = 15% per year. Which tool to choose?
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