Home & More is considering a project with cash flows of −$368,000, $133,500, −$35,600, $244,700, and $258,000 for Years 0 to
4, respectively. Should this project be accepted based on the combination approach to the modified internal rate of return if both the discount rate and the reinvestment rate are 14.6 percent? Why or why not?
1 answer:
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Cost is the amount of spending on a product or service. The lifetime cost of the dishwasher was $1029.8 which is $1030 approximately.
<h3>What is the cost?</h3>Cost is the amount incurred on acquiring a product or using a service. Cost is the value of the product or service.
The lifetime value of an asset is the total expense incurred on the asset from acquisition till disposal.
The lifetime cost of the dishwasher will be the sum of its cost, sales tax, and water and electricity charges for 6 years.
The water and electricity charges are $0.09 and $0.13 per use. The total number of times the dishwasher is used can be calculated as:
The number of use per week are 10, number of weeks in a year are 52, and number of years of use are 6.
Therefore, the water and electricity charges will be:
The cost of the dishwasher will be a combination of its purchase price and sales tax. Therefore:
The lifetime cost of the dishwasher will be:
Therefore the correct option is A.
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