I believe the correct option is d
Answer:
A furniture manufacturing company aims to upgrade its paint and drying section. A technical consultant suggests two investment options. The first involves purchasing Alpha brand painting and drying equipment for $8,700,000, incurring an annual maintenance fee of $2,200,000 and having a salvage value of $2,400,000 after six years. The second option is to acquire Beta brand equipment at a purchase cost of $6,800,000, with maintenance expenses starting at $900,000 in the first year and increasing by $350,000 each subsequent year. This equipment has a nine-year lifespan, with a salvage worth of $1,500,000 at the end. The minimum attractive rate of return (TMAR) is 8% per year. To make the most economical choice, considering both options yield similar productivity and income, which option should be chosen?
Explanation:
