Problem 8-34, Air conditioners
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Calculate the equivalent annual cost of the Econo-Cool and the Luxury Air, and determine which model is more cost-effective.
Calculate the equivalent annual cost of the Econo-Cool and the Luxury Air, and determine which model is more cost-effective.
Determine the years to wait to maximize the NPV, and determine the NPV at that optimal year, its dollar equivalent today.
Calculate the equivalent annual cost of the replacement decision, and decide whether to replace it now or not.
Determine if you should replace an old forklift with a new one that will last much longer. Determine the EAC of the new machine and the equivalent cost of owning and operating the forklift. Should the forklift be replaced?