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Opportunity cost of capital

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You are starting a vegan restaurant and need to buy a vehicle for delivery orders. You have two models in mind. Model A costs $10,000 and is expected to run for 6 years; Model B is more expensive, with a price of $15,000 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 10.6 percent.

Reference no: EM132535474

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