Say i have two ovens to choose from oven a is a high


Buying a new oven for my cookie business. Say I have two ovens to choose from. Oven A is a high capacity oven. Oven A is very expensive; it costs $45,000. I can borrow the money for Oven A at 9%. Oven A will allow me to produce enough cookies that I will add $10,000 in revenue at the end of each year after I make the purchase. Oven B is much cheaper but has a lower capacity. Oven B is only $20,000 but will only allow me to add $3,000 in additional revenue at the end of each year. I want to consider both ovens over the next 10 years. How do I decide which oven will give me the greatest value? [This is a problem that should be analyzed using NPV]

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Finance Basics: Say i have two ovens to choose from oven a is a high
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