April plans to lease a machine for her photography business. She can lease an RX90 Scanner for $3,500 per year for 4 years as well as pay a onetime $650 initial set up fee. April can also lease a PA36 scanner for $4,200 per year for 3 years as well as pay a onetime inital set up fee of $350. Because april's business is a non-profit business, she does not pay taxes. If April's required return is 10% and she will need to replace either machine when the respective lease ends, which machine should she choose?
|Total Annualised Cost
Since annualised cost of RX90 Scanner is lower as compared to PA36 Scanner, April should choose RX90 Scanner.
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