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You are evaluating two offers for hospital imaging equipment

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You are evaluating two offers for hospital imaging equipment. Perform an NPV analysis for each offeror. Enter the Total NPV for each offeror and identify the better offer (Offeror A or Offeror B).

 

The OMB discount rate is .5%.

 

Offeror A proposes a purchase for $65,000, with required maintenance costs in Year 2 for $2,000 and a salvage value in Year 3 of $4,000.

 

Offeror B proposes a lease for $22,500 per year for three years.(1 Point)

Offeror A: -$63,039.80, Offeror B: -$67,164.75, Better offer: Offeror A

 

Offeror A: -$67,164.75, Offeror B: -$63,039.80, Better offer: Offeror B

Offeror A: -$53,039.80, Offeror B: -$65,164.75, Better offer: Offeror B

Offeror A: -$65,039.80, Offeror B: -$59,164.75, Better offer: Offeror A