Reference no: EM133112571

Office Automation is obliged to choose between two copiers: A and B. The economic lives of these copiers are different. The costs and maintenance expenses of these copiers are given below in real terms. The nominal discount rate is 15.0% , and the inflation rate is 5.0% . Which copier should the company choose? Ignore taxes and depreciation. The costs and maintenance expenses in real terms for CopierA are: 2600 in Year 0, 300 in Year 1, 300 in Year 2, 300 in Year 3, and 300 in Year 4. The costs and maintenance expenses in real terms for Copier B are: 1300 in Year 0, 500 in Year 1, 500 in Year 2, 500 in Year 3, 500 in Year 4, 500 in Year 5, and 500 in Year 6.