Two systems are being considered for the same task. System 1 costs $63 000 new and is estimated to last four years. It will then have a salvage or trade-in value of $4 500. The cost to replace System 1 will be 3.5 percent more each year than it was the year before. It will cost $4 200 per year to operate and maintain System 1, payable at the end of each year. System 2 costs $120 000 to buy and will last eight years. It will have a salvage or trade-in value of $6 000. The cost to operate and maintain System 2 will be $2 400 per year, payable at the end of each year. Assume the task will be performed for eight years. Compare the two systems, state your basis of comparison, and include a cash-flow diagram. All interest rates are 4.0 percent per year unless otherwise stated.
What will be an ideal response?
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A. exposure A B. exposure B C. exposure C D. exposure D
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Answer the following statement true (T) or false (F)
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What will be an ideal response?