Bank of America is considering replacing all of it existing photocopiers in its corporate office...
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Bank of America is considering replacing all of it existing photocopiers in its corporate office with new ones. They can replace it with Canon, which will cost $350,000 in total. The Canon machine is more efficient and is expected to use less ink, which will result in an annual pre-tax savings of $165,000. Canon machines is expected to last 4 years before replacement is required. Alternatively, they can replace it with Toshiba, which will cost $425,000 in total. The Toshiba machine will result in an annual pre-tax savings of $138,000. Toshiba machine is expected to last 7 years before replacement is required. The cost of capital is 10% and the tax rate is 30%. Should Bank of America replace all its existing photocopiers? If so, which brand should it choose
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