costs of capital (COC)

29.Your firm spends $473,000 per year in regular maintenance of its equipment. Due to the economic downturn, the firm considers forgoing these maintenance expenses for the next 3 years. If it does so, it expects it will need to spend $1.9 million in year 4 replacing failed equipment. For what costs of capital (COC) is forgoing maintenance a good idea?

For costs of capital that are less than the replacement costs.

For costs of capital that are greater than the NPV.

For costs of capital that are less than the IRR.

For costs of capital that are greater than the IRR.