Evaluate the plans at a marr

Reference no: EM131004371

The TechEdge Corporation offers two forms of 4-year service contracts on its closed-loop water purification system used in the manufacture of semiconductor packages for microwave and high-speed digital devices. The Professional Plan has an initial fee of $52,000 with annual fees starting at $1000 in contract year 1 and increasing by $500 each year. Alternatively, the Executive Plan costs $62,000 up front with annual fees starting at $5000 in contract year 1 and decreasing by $500 each year. The initial charge is considered a setup cost for which there is no salvage value expected. Evaluate the plans at a MARR of 9% per year.

Reference no: EM131004371

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