XYZ General Hospital is evaluating new office equipment offered by three companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use NPW analysis to determine the company from which you should purchase the equipment.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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XYZ General Hospital is evaluating new office equipment offered by three companies. In each
case the interest rate is 15% and the useful life of the equipment is 4 years. Use NPW analysis to
determine the company from which you should purchase the equipment.
A
B
First Cost
$15, 000
$25, 000
$20, 000
Maintenance Cost
1, 600
400
900
Annual Benefit
Salvage value
13, 000
6, 000
8, 000
11, 000
3, 000
4, 500
Transcribed Image Text:XYZ General Hospital is evaluating new office equipment offered by three companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use NPW analysis to determine the company from which you should purchase the equipment. A B First Cost $15, 000 $25, 000 $20, 000 Maintenance Cost 1, 600 400 900 Annual Benefit Salvage value 13, 000 6, 000 8, 000 11, 000 3, 000 4, 500
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