Which excavator is more economical for the long run

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There are two excavators to choose from, A and B: The capital cost tor Excavator A is $150k, runs for 4 years and the maintenance costs are $20K per year. The capital cost for Excavator B is $150k, runs tor 3 years and the maintenance costs are $15k per year. Using the comparison of challenging alternatives with unequal lives, determine. Which excavator is more economical for the long run at a 15% discount rate.

Reference no: EM13735490

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