Business, 21.04.2020 17:52 natekotterman

OM Construction Company must choose between two types of cranes. Crane A costs $600,000, will last for five years, and will require $60,000 in maintenance each year. Crane B costs $750,000, will last for seven years, and will require $30,000 in maintenance each year. Maintenance costs for cranes A and B occur at the end of each year. The appropriate discount rate is 12% per year. Which machine should OM Construction purchase?

Crane A as EAC is $226,444

Crane B as EAC is $194,336

Crane A because its PV is $816,286, i. e., less than the PV of Project B

Cannot be calculated as the revenues for the project are not given

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OM Construction Company must choose between two types of cranes. Crane A costs $600,000, will last f...

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