Which one will you recommend?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...
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Solve it correctly please. I will rate. 

A company has asked to you help them select anew
backhoe. You have a choice between a wheel-mounted
version, which costs $50,000 and has an expected life
of 5 years and salvage value of $2000, and a
track-mounted one, which costs $80,000, with a 5-year
life and an expected salvage value of $10,000. Both
machines will achieve the same productivity. MARR is
8% per year. Which one will you recommend?
Transcribed Image Text:A company has asked to you help them select anew backhoe. You have a choice between a wheel-mounted version, which costs $50,000 and has an expected life of 5 years and salvage value of $2000, and a track-mounted one, which costs $80,000, with a 5-year life and an expected salvage value of $10,000. Both machines will achieve the same productivity. MARR is 8% per year. Which one will you recommend?
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