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 equivalent annual annuity.
b. Hoist A, since it has a greater present value (PV).
c. Hoist B, since it has a greater present value (PV).
d. Hoist B, since it has a greater equivalent annual annuity.
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A garage is comparing the cost of buying two different car hoists. Hoist A will cost $20,000, will r...
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