Perform a comparison of the costs

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Question: A competing company is considering the same Option Y above. Option Y (The Crush Master Elite) would cost $15k initially, and $2.5k every year for routine operation and maintenance. The seller of this unit estimates a useful life of 10 years. The unit has no salvage value. The company is also considering a new option, Option Z (The Rubble Maker), which would cost $5.2k initially and have a cost of $2k every other year beginning on year two. Half way through its lifespan it has a single additional cost of $6k. The unit has a lifespan of 12 years and has no salvage value. i = 4%. Perform a comparison of the costs of these two options. Provide as your answer the decimal ratio of the cost of option Z to the cost of option Y, Cz/Cy, to at least three significant figures. (e.g., if the cost of Option Z divided by the cost of Option Y is 0.384, enter 0.384).

Reference no: EM131959715

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