A corporation evaluates all capital investments using a 12% annual rate of return before taxes. The corporation must purchase a new tangent scanner.
The following estimates pertain to the two models available.
Scanx Holo-Scan initial cost ($) 90,000 170,000 life (yr) 5 5 salvage value ($) 15,000 50,000 annual cost ($) 44,000 70,000 generated annual income ($) 100,000 160,000
The present worth of costs and income for the two models indicates that Holo-Scan is worth about how much more than Scanx?
