Question Details

[solution] » A firm can buy a new printer for $2,000 payable immediately.  The new printer would save the firm of


Description

Answer Download


The Question

A firm can buy a new printer for $2,000 payable immediately.  The new printer would save the firm of $2,000 the first year of operation, $4,000 in the second year, and $2,000 in the fifth year.


The firm receives no savings from the printer in the third and fourth year of its life, and will need to spend $4,000 on it in the third year due to expensive repairs.  The machine is scrapped at the end of 5 years, but there is no scrap value.

As an alternative to outright purchase, the firs could hire a printer, paying $1000 per year, in advance, for the five (5) years.  The firm would still expect to make the same costs and saving as in the outright purchase, but the hire company would meet the repair cost of year three (3).

If the going rate of interest is 10%, using net present value, advise the firm as to which of the two methods (buy or hire) should be used to obtain the printer.

 


Solution details

Solution #00070245

[solution] » A firm can buy a new printer for $2,000 payable immediately.  The new printer would save the firm of.zip

Uploaded by: Tutor

Answer rating:

This paper was answered on 14-Oct-2020

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Oct 14, 2020

EXPERT

Tutor

ANSWER RATING

BEST TUTORS

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

STUCK WITH YOUR PAPER?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now