An elevator company has redesigned their prod- uct to be 50% more energy efficient than hydraulic...

 

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An elevator company has redesigned their prod- uct to be 50% more energy efficient than hydraulic designs. Two designs are being considered for implementation in a new building. (a) Given an interest rate of 20% which bid should be accepted? Alternatives Installed cost Annual cost Salvage value Life, in years A $45,000 2700 3000 10 B $54,000 2850 4500 15 (b) Research and list a few attributes that the com- pany might be using in the elevators' major sys- tems: drive, cab, hoist, and control mechanisms that make them more energy efficient. An elevator company has redesigned their prod- uct to be 50% more energy efficient than hydraulic designs. Two designs are being considered for implementation in a new building. (a) Given an interest rate of 20% which bid should be accepted? Alternatives Installed cost Annual cost Salvage value Life, in years A $45,000 2700 3000 10 B $54,000 2850 4500 15 (b) Research and list a few attributes that the com- pany might be using in the elevators' major sys- tems: drive, cab, hoist, and control mechanisms that make them more energy efficient.

Answer rating: 100% (QA)

a To determine which bid should be accepted we calculate the net present value NPV of each alternat... View the full answer