Which machine should be chosen using an interest rate

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North City must choose between two new snow-removal machines. The SuperBlower has a $70,000 first cost, a 20 year life, and an $8000 salvage value. At the end of 9 years , it will need a major overhaul costing $19,000. Annual maintenance and operating costs are $9000. The Sno-Mover will cost $50,000, has an expected life of 10 years, and has no salvage value. The annual maintenance and operating costs are expected to be $12,000. Using a 12% interest rate, which machine should be chosen?

Reference no: EM13297397

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