Office Automation, Inc must choose between two copiers, the XX40 of the RH45. The XX40 costs $1,500 and will last for three years. The copier will require a real after-tax cost of $120 per year after...

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Office Automation, Inc must choose between two copiers, the XX40 of the RH45. The XX40 costs $1,500 and will last for three years. The copier will require a real after-tax cost of $120 per year after all relevant expenses. The RH45 costs $2,300 and will last five years. The real after-tax cost for the RH45 will be $150 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 5 percent per year, and the nominal discount rate is 14 percent. Which copier should the company choose?

Answered Same Day Dec 21, 2021

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Robert answered on Dec 21 2021

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Office Automation, Inc must choose between two copiers, the XX40 of the RH45. The XX40 costs $1,500 and will last for three years. The copier will require a real after-tax cost of $120 per year after...

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