A Garage Is Comparing the Cost of Buying Two Different

question 69

Multiple Choice

A garage is comparing the cost of buying two different car hoists.Hoist A will cost $20,000,will require servicing of $1000 every two years,and last ten years.Hoist B will cost $15,000,require servicing of $800 per year,and last eight years.If the cost of capital is 7%,which is the better option,given that the firm has an ongoing requirement for a hoist?

• A)Hoist A,since it has a greater present value (PV).
• B)Hoist B,since it has a greater present value (PV).
• C)Hoist A,since it has a greater equivalent annual annuity.
• D)Hoist B,since it has a greater equivalent annual annuity.
• E)Hoist A,since it has a lower equivalent annual annuity.

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Definitions:

Lens

in psychology, it often refers to the perspective or viewpoint through which an individual sees and interprets the world.

Aqueous Humor

A clear, watery fluid found in the eye, between the lens and the cornea, which helps to maintain intraocular pressure and provide nutrients.

Electromagnetic Spectrum

The range of all types of electromagnetic radiation, which includes, among others, radio waves, microwaves, infrared, visible light, ultraviolet, X-rays, and gamma rays.

Fovea

A small depression in the retina of the eye where visual acuity is highest, due to the dense concentration of cones.