9. You have been asked to advise on which of the following three alternatives for...
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Accounting
9. You have been asked to advise on which of the following three alternatives for windows is the most economic from the combined viewpoint of capital costs and maintenance costs.
a. Softwood windows costing initially GH6,000 fixed complete and requiring to be repainted every fifth year at a cost of GH500.
b. Hardwood windows costing initially GH8,000 fixed complete and requiring to be treated every tenth year at a cost of GH200.
c. Anodised aluminium windows at a cost of GH1,400 fixed complete and not requiring any significant periodic maintenance.
For the purpose of this question, you are to assume that the life of the building will be 40 years and that the compound interest rate will be 5%. Show the calculations you would make before giving your advice.
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