Calculating present value [15—25 min] Lexo Company needs new manufacturing equipment. T...

Calculating present value [15—25 min]

Lexo Company needs new manufacturing equipment. Two companies can provide similar equipment but under different payment plans:

Requirements

1. Calculate the present value of Plan A.

2. Calculate the present value of Plan B.

3. Lexo will purchase the equipment that costs the least, as measured by present value. Which equipment should Lexo select? Why? (Challenge)