Crash realty must choose between two copiers

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Reference no: EM131850128

Crash Realty must choose between two copiers, the 4GX and the 5GQ. The 4GX costs $4000 and will last for three years. The copier will require a real aftertax cost of $500 per year including all relevant expenses. The 5GQ costs $6000 and will last five years; its real aftertax cost will be $550 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 2 percent per year, and the nominal discount rate is 7 percent. Which copier should the company choose?

Reference no: EM131850128

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