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.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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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