Problem the ljb company must replace a freezer and is, Ask an Expert

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Problem: The LJB Company must replace a freezer and is trying to decide between the following two alternatives:

Item	Freezer A	Freezer B
Investment required	($29,000)	($25,000)
Annual electrical bill	(3,000)	(4,000)
Salvage value	6,000	5,000
Project life in years	11	11

The LJB Company's cost of capital is 8 percent.

Which investment provides LJB with the lowest total cost?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91731567

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