A company wants to choose from 3 products
January 6th, 2018
A company wants to choose from 3 products.Product 1 cost $27,000 and has a salvage value of $300Product 2 cost $19,000 and has a salvage value of $250Product 3 cost $21,000 and has a salvage value of $350If we finance product 1 at 10% APR, 5% for Product 2 and 0% for Product 3, which unit would they pick? Compare the present values of each project. Does the term of the loan make a difference?Compute the PV of each of the three products for 1 through 10 years. Each year to show a PV.