4. (15 points) Which option should be selected based on a present worth comparison at an...

 

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4. (15 points) Which option should be selected based on a present worth comparison at an interest rate of 10%? First cost, $ Annual operating & maintenance cost, $/year Salvage value, $ Life, in years a. Draw the cash flow diagram for Option X. b. Calculate the present worth for Option X. c. Which option should be selected? Why? Option X Option Y -230,000 -380,000 -9,000 -12,000 12,000 140,000 3 6 4. (15 points) Which option should be selected based on a present worth comparison at an interest rate of 10%? First cost, $ Annual operating & maintenance cost, $/year Salvage value, $ Life, in years a. Draw the cash flow diagram for Option X. b. Calculate the present worth for Option X. c. Which option should be selected? Why? Option X Option Y -230,000 -380,000 -9,000 -12,000 12,000 140,000 3 6

Answer rating: 100% (QA)

Option X Option Y First Cost 230000 380000 Annual OM Cost 9000 12000 Salvage Value 1... View the full answer