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Capital Budgeting Maintenance Costs

Capital Budgeting Maintenance Costs

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Published by ClassOf1.com
"Beryl's Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options:
a) Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in ongoing maintenance expenses.
b) Purchase a new, more advanced machine for $250,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $10,000 per year. Also, $35,000 will be spent up front in training the new operators of the machine.
"
"Beryl's Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options:
a) Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in ongoing maintenance expenses.
b) Purchase a new, more advanced machine for $250,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $10,000 per year. Also, $35,000 will be spent up front in training the new operators of the machine.
"

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Categories:Types, School Work
Published by: ClassOf1.com on Mar 26, 2013
Copyright:Attribution Non-commercial
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07/05/2013

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