Four types of batteries are being evaluated by the facility supervisor. The economic estimates for the...

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Four types of batteries are being evaluated by the facility supervisor. The economic estimates for the alternatives are shown in the following table. Lithium Factor Alternative Initial Investment Maintenance Cost Revenue Salvage Value Useful Lives Depreciation 25,000 1,210 6,400 8,500 8 Straight Line Alkaline 35,000 1,380 7,200 9,500 10 SYD Carbon Zinc 40,000 1,530 7,320 10,000 12 DB Silver Oxide 30,000 1,300 6,860 9,000 15 DDB Revenues and maintenance costs are annually recurring and are considered unchanging for the study period. If the minimum rate of return as established by top management is 10% and the study period is until 15 years, which battery type is economically the best to use? Use the Present Worth method. (25 points) Four types of batteries are being evaluated by the facility supervisor. The economic estimates for the alternatives are shown in the following table. Lithium Factor Alternative Initial Investment Maintenance Cost Revenue Salvage Value Useful Lives Depreciation 25,000 1,210 6,400 8,500 8 Straight Line Alkaline 35,000 1,380 7,200 9,500 10 SYD Carbon Zinc 40,000 1,530 7,320 10,000 12 DB Silver Oxide 30,000 1,300 6,860 9,000 15 DDB Revenues and maintenance costs are annually recurring and are considered unchanging for the study period. If the minimum rate of return as established by top management is 10% and the study period is until 15 years, which battery type is economically the best to use? Use the Present Worth method. (25 points)

Answer rating: 100% (QA)

SOLUTION To determine the economically best battery type we need to calculate the Present Worth PW o... View the full answer