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
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Option X Option Y First Cost 230000 380000 Annual OM Cost 9000 12000 Salvage Value 1... View the full answer
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
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