The future at the same price with the same salvage value

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Reference no: EM131963555

You can choose between two purchases: Machine A or Machine B. Machine A costs $25,000 and has a salvage value of $12,000 after 3 years. Machine B costs $30,000 and has a salvage value of $16,000 after 4 years. You can lease a Machine B equivalent for $6,000 per year, if you initially purchased Machine B. You need a machine for a total of 6 years, and can purchase a new machine in the future at the same price with the same salvage value. If i is 9% annual rate compounded annually, which machine should be purchased? Show work and justify answer. Need work, not excel

Reference no: EM131963555

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