For its proposed expansion, an ice plant company is selecting from two offers of ice cans. The data on the offers are as follows: OFFER A OFFER B Total Cost P730,000 P650,000 Annual Maintenance...

For its proposed expansion, an ice plant company is selecting from two offers of ice cans. The data on the offers are as follows:

For their replacements, the company is putting up a sinking fund to earn 17.5% interest compounded annually. If the money to purchase the ice cans is to be borrowed at 25% annual interest and the tax on the first cost is 3%, which offer will you recommend to be purchased? Show solutions.