Compare two units a and b a has a new cost of 42000 a life, Microeconomics

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Compare two units a and b a has a new cost of 42000 a life

Question: Compare two units, A and B. A has a new cost of $42000, a life expectancy of 14 years. A salvage value of $4000. and annual operating cost of $3000. B has a new cost of $21000. A life expectancy of 7 years. A salvage value of $2000. and an operating cost of $5000. Assume an annual interest rate of 7%. which of the two units would you recommend? What initial cost of machine A would make the two machines identical in overall cost?

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Microeconomics: Compare two units a and b a has a new cost of 42000 a life

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Microeconomics: Compare two units a and b a has a new cost of 42000 a life

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