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Business, 27.06.2020 23:01 epmeche05

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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