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Capital Budgeting -- Tanning Beds

Patsy a call to Sun-quest Inc., the salesman, Mike, who answered the call was extremely helpful, courteous, and convincing. "Let's say I do start the tanning service at my salon, Mike, should I go in for the less expensive tanning bed or the more expensive tanning dome?" asked Patsy, eager to sort out her dilemma. "Well," responded Mike, "Each unit has its own pros and cons. The bed costs considerably less than the dome, but it takes longer for an equivalent tan per session. The dome on the other hand, costs more, but it does the job faster, provides for a complete body and facial tan, and lasts longer."

Complete probelm attached. Financial comparison between the bed and the dome.


Solution Summary

Solution attached calculations in Excel and a report in Word for the budgeting choices that need to be made when opening a new tanning salon.