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Ridgely Custom Meta l Products (RGMP) must purchase a new tube bender. It is considering two alternatives that have the following characteristics:

 

Model T

Model A

First Cost

$ 100,000

$150,000

Economic Life

5 years

5 years

Yearly Savings

$ 50,000

$ 62,000

Salvage Value

$ 20,000

$ 30,000

Construct a break-even graph showing the present worth of each alternative as a function of interest rates between 6% and 20%.

Which is the preferred choice at 8% interest? Which is the preferred choice at 16% interest? What is the break-even interest rate?

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M92184737

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