You are planning to purchase a range and have to make a choice among the following three models:
|
Model 1 |
Model 2 |
Model 3 |
|
|
Cash cost |
$ 5,000 |
$ 5,500 |
$ 5,300 |
|
Estimate life |
5 years |
5 years |
5 years |
|
Trade-in value at end of life |
$ 1,000 |
$ 1,200 |
$ 800 |
|
Cash from sale of old machine |
$ 200 |
$ 200 |
$ 200 |
|
Installation of new machine |
$ 75 |
$ 100 |
$ 100 |
|
Initial training cost in year 1 |
$ 350 |
$ 300 |
$ 250 |
|
Annual maintenance contract |
$ 300 |
$ 275 |
$ 200 |
|
Annual cost of supplies |
$ 200 |
$ 200 |
$ 200 |
|
Annual wage costs of employees |
$32,000 |
$32,000 |
$32,000 |