Question: 3 0 - BuildPro Contractors, a major player in the construction industry, is preparing for a large - scale infrastructure project that requires the purchase
BuildPro Contractors, a major player in the construction industry, is preparing for a largescale infrastructure project that requires the purchase of new heavyduty excavation equipment. Two suppliers have submitted bids, each offering equipment with different cost structures and features. Supplier X proposes equipment with an initial cost of $ an annual maintenance and operation M&O cost of $ per year, and a salvage value of $ at the end of its year useful life. Supplier Y offers equipment priced at $ with lower annual M&O costs of $ per year and a higher salvage value of $ at the end of its year useful life. BuildPros financial team evaluates investments using a MARR of per year. Additionally, for projects with flexible timelines, BuildPro prefers to conduct evaluations over a fixed year study period, regardless of the equipment's actual useful life.
i Calculate the present worth cost for each suppliers equipment over their respective useful lives. Which option should BuildPro choose?
ii Using a year study period for evaluation and assuming salvage values remain constant, which suppliers equipment would be the better choice?
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