Deciding between two couches

Assignment Help Financial Management

Reference no: EM131825410

You’re deciding between two couches. The first one, from Ikea, costs $800 and will last for 3 years. The second one, from Restoration Hardware, costs $3200 but will last for 17 years. Your personal discount rate is 6%. If you will continue to buy the same couch for the rest of eternity (each time it breaks), which should you buy? Please list out the formulas involved in solving this question.

Reference no: EM131825410

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