Annual maintenance and operating costs

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Reference no: EM131807213

North City must choose between two new snowremoval machines. The SuperBlower has a $70,000 first cost, a 20-year life, and an $8000 salvage value. At the end of 9 years, it will need a major overhaul costing $19,000. Annualmaintenance and operating costs are $9000. The Sno-Mover will cost $50,000, has an expected life of 10 years, and has no salvage value. The annual maintenance and operating costs are expected to be $12,000. Using a 12% interest rate, which machine should be chosen?

Reference no: EM131807213

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