A lawn maintenance company compares two ride-on mowers-the Excelsior, which has an expected working-life of six years, and the Grassassinator, which has a working life of four years. After examining the equivalent annual annuities of each mower, the company decides to purchase the Excelsior. Which of the following, if true, would be most likely to make them change that decision?
A) Fuel prices are expected to rise and raise the annual running costs of all mowers.
B) The mower is only expected to be needed for three years.
C) The prices of equivalent mowers are expected to grow in the future as lawnmower manufacturers consolidate.
D) The number of customers requiring lawn-mowing services is expected to sharply increase in the near future.

Question

Quizplus · Accepted Answer

Since the Excelsior has an expected working-life of six years, it would not be the best choice if it is only expected to be needed for three years. In this case, the Grassassinator may be a more cost-effective choice as it has a shorter working life but a lower initial cost. The other options may affect the running costs or market conditions, but they do not directly impact the decision between the two mowers with different working lives.

A Lawn Maintenance Company Compares Two Ride-On Mowers-The Excelsior, Which