Two machines, A and B, which perform the same functions, have the following costs and lives. | |||||||
Type | Initial cost | Annual maintainence cost | Life | ||||
A | 6200 | 500 | 5 | ||||
B | 6700 | 650 | 7 | ||||
The two machines are mutually exclusive and the cost of capital is 10 percent. | |||||||
Which machine would you choose? |
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