Buy motorcycle for delivery orders

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Reference no: EM131450390

You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $9,300 and is expected to run for 6 years; model B is more expensive, with a price of $15,700 and has an expected life of 9 years. The annual maintenance costs are $840 for model A and $750 for model B. Assume that the opportunity cost of capital is 11 percent. Calculate EAC for both the models and choose which one should you buy? (Round intermediate calculations and final answers to 2 decimal places, e.g. 15.25.)

Reference no: EM131450390

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