An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $46,000, an annual operating cost (AOC) of $7,000, and a service life of 2 years. Method B will cost $86,000 to buy and will have an AOC of $3,500 over its 4-year service life. Method C costs $115,000 initially with an AOC of $6,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 12% of its first cost. Perform a present worth analysis to select the method at i = 10% per year. Determine present worth

The present worth of method A is $ .

The present worth of method B is $ .

The present worth of method C is $ .

Answer rating: 100% (QA)

1 PW Method A 46000 7000 x PA12 2 46000 7000 x 16901 46000 118307 578307 2 ... View the full answer