Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 11.3%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here: E, which should it choose? (Note: dollar amounts are in thousands.) ..... Based on the costs of each model, which should it choose? (Select the best choice below.) A. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. B. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. C. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. D. Gateway Tours should choose Old Reliable because it lasts longer. O O O O

Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 11.3%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here: E, which should it choose? (Note: dollar amounts are in thousands.) ..... Based on the costs of each model, which should it choose? (Select the best choice below.) A. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. B. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. C. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. D. Gateway Tours should choose Old Reliable because it lasts longer. O O O O

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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