Sharons best available use of the money to do the strip and


Sharon Inc., a manufacturer of snowmobiles has detected asbestos, a hazardous material , in the insulation of its factory. A complete strip and repair job will have to be done at a considerable cost. Two bids for the job have been obtained. Doust construction inc will do the work for 120,000. With a 20,000 down payment. Doust Construction will finance the balance over 6 years at 10%, requiring Sharon to make six annual payments. Chamberlain Inc. will do the job for 122,500 and will finance the entire amount at 6%, requiring Sharon to make six annual payments. Sharons best available use of the money to do the strip and repair job is 8 percent. Which contractor should sharon's use?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Sharons best available use of the money to do the strip and
Reference No:- TGS02641902

Now Priced at $10 (50% Discount)

Recommended (90%)

Rated (4.3/5)