Engineering Economy problem.

Please, when answering this problem, it will be more than appreciated if you can present all information before solving, in order to learn and understand it. Example: Present Value = 20,000(P/F, i, n)+45,000(A/F, i, n)(P/F, i, n)... Thanks in advance!

There are two manufacturing processes that can be used by a company to reduce energy losses in the equipments. The following cost information for these two processes is known:

	Process A	Process B
Initial Cost	$170,000	$220,000
Operation and Maintenance Cost	$7,000 quarterly	$5,000 quarterly
Useful Life (Life Cycle)	2 years	4 years
Residual Value	$30,000	$42,000

By doing the following analysis, select which manufacturing process must be selected (A or B):

a) Find the Present Value for Process A and for Process B, with an interest rate of 12% annually computed quarterly.

b) Find the Quarterly equivalent uniform value for Process A and for Process B with an interest rate of 8% annually computed quarterly

c) Find the Capitalized Cost for Process A and for Process B with an interest rate of 14% annually computed quarterly

d) Which manufacturing process must be selected. Process A or Process B?