case study

The design team has narrowed its mechanical system options to the following two choices. Both meet the technical and performance requirements necessary for the project, making the final decision one of economics. Given the following data, which option would you rec- ommend? Option 1 Option 2 Initial purchase price $200,000 $250,000 Annual maintenance and operating cost $25,000 $20,000 Salvage value (after 15 years) $25,000 $30,000 Cost of money 8% 8%