Which battery is better based on the cash flows

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Reference no: EM13720164

Battery “A” costs $5000 and lasts 3 years. Maintenance costs will be $300 per year, and there is a one-time disposal cost of $400 at the end of three years. Battery “B” costs $8000 and lasts 5 years. Maintenance costs will be $200 per year, and there is a one-time disposal cost of $500 at the end of five years.

You can assume repeatability for whichever battery you choose. If the minimum attractive rate of return in 20%, which battery is better based on the cash flows

Reference no: EM13720164

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