Question

A lawn maintenance company compares two ride -on mowersthe Excelsior, which has an expected working-life of six years, and the Grassassinator, which has a working life of four years. After examining theequivalent annual annuities of each mower, the company decides to purchase the Excelsior. Which of the following, if true, would be most likely to make them change that decision?A) The mower is only expected to be needed for three years.B) The number of customers requiring lawn-mowing services is expected to sharply increase in the near future.C) Fuel prices are expected to rise and raise the annual running costs of all mowers.D) The prices of equivalent mowers are expected to grow in the future as lawnmower manufacturersconsolidate.

Answer 1

Answer:

A) The mower is only expected to be needed for three years.

Explanation:

Excelsior is surely more expensive than the Grassassinator, due to its longer working life. Therefore, it is essential to examine the period of use of the lawn mower. There is absolutely no need to invest in a long-running lawn mower if it is going to be needed twice less the time. In this case, it would be more financially efficient to invest in the Grassassinator.