A company called DS Co. is expected to spend $20,000 for machinery, to be used for 3 years, and that has an annual operating cost (AOC) of $ 8,000, with a salvage value of $3000 at the end of the three year period. Determine the AW values for one and two life cycles at i=14% per year. A company wishes to evaluate two similar pieces of equipment by which the company can meet new state of environmental requirements for dust emission. The MARR is 12% per year. Determine which alternative is economically.  (Data regarding the two equipment X and Y are shown on the table below) (a)Using the AW method (b)AW method with a 3 year study period

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Equipment Y First cost, $ 40,000 75,000 AOC, $ per year 25,000 15,000 Life, year 4 6. Salvage value, $ 10,000 7,000 Estimated value after 3 years, $ 14,000 20,000 Equipment Y First cost, $ 40,000 75,000 AOC, $ per year 25,000 15,000 Life, year 4 6. Salvage value, $ 10,000 7,000 Estimated value after 3 years, $ 14,000 20,000

Answer rating: 100% (QA)

Dr S Co n Inihal frot cost p 20000 Noj year of Service 3 years Annna... View the full answer