Solution-Assume that the opportunity cost of capital

Assume that the opportunity cost of capital

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1. You are starting a family pizza restaurant and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $9,000 and is expected to run for 6 years; model B is more expensive, with a price of $14,000 and an expected life of 10 years. The annual maintenance costs are $800 for model A and $700 for model B. Assume that the opportunity cost of capital is 10 percent. Which one should you buy?

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Assume that the opportunity cost of capital

Reference no: EM13949299

Reference no: EM13949299

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