Excise Moving Company Ltd is looking to expand their service offering by introducing a new...
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Excise Moving Company Ltd is looking to expand their service offering by introducing a new courier line specifically targeted at medium-sized removals. The owners of the firm need to invest in a new fleet of smaller removal vehicles. A dealer draws up a quote for the firm for two different types of small lorry; a more expensive, reputable model manufactured domestically, and a cheaper, imported model. The owners decide to buy a fleet of the more expensive model despite the higher capital cost. Explain why this is or is not a good financial decision in terms of cost-benefit as well as solvency.
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