Case study.

Case Study: THE CHANGING SCENE OF AN ANNUAL WORTH ANALYSIS Harry, owner of an automobile battery distributorship has decided to place surge protectors in-line for all his major pieces of testing equipment. Two different manufacturers' protectors need to be compared using a MARR of 15%. Scenario 1: PowrUp and Lloyd's have submitted the following economic information (See table below) PowrUp Lloyd's Cost and installation, $ -26,000 -36,000 Annual maintenance cost, $ per year -800 -300 Salvage value, $ 2,000 3,000 Annual repair savings, $ per year 25,000 35,000 Useful life, years 6 10 Q la) Calculate the annual worth of the "PowrUp" protector's (10 points) Q 1b) What is the capital recovery amount for the PowrUp protectors? (3 points) Q 1c) Calculate the annual worth of the "Lloyd" protector's (10 points) Q 1d) What is the capital recovery amount for the Lloyd's protectors? (3 points) Q le) Which manufacturers' protectors should be selected by Harry using annual worth analysis (4 points) Scenario 2: Lloyd's have recently revised their economic estimates which are shown in the table below. Lloyd's (new estimates) Yea Initial Upgrade Salvage Annual Repair r investment cost value maint savings DO YOUAWNHO -$36,000 -$300 $35,000 $300 $32,000 -$300 $28,000 -$1,200 $26,000 -$1,320 $24,000 -$9,000 -$1,452 $22,000 -$1,597 $20,000 -$1.757 $18.000