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You are starting a family pizza parlor and need to buy a motorcycle for delivery orders....

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 $8,200 and is expected to run for 7 years; Model B is more expensive, with a price of $13,600, and has an expected life of 9 years. The annual maintenance costs are $760 for Model A and $740 for Model B. Assume that the opportunity cost of capital is 9 percent.

Calculate equivalent annual costs (EAC) of each models. (Do not round the discount factor. Round intermediate calculations and final answers to 2 decimal places, e.g. 15.25.)

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jeff jeffy answered 1 year ago
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