Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and
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Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and profits are in dollars):
Smoothie | Creamy | |
First Cost | 12,000 | 34,500 |
Service Life | 12 Years | 14 Years |
Annual Profit | 4,300 | 10,900 |
Annual Operating Cost | 1,250 | 3,325 |
Salvage Value | 2,000 | 5,000 |
What method of analysis would you use to most easily select the model to purchase?
(a) | PW (Standard) | |
(b) | AW (Standard) | |
(c) | PW (Repeated Lives) | |
(d) | All of the above |
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