One of two methods must be used to produce expansion anchors. Method A costs $60000 initially...

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One of two methods must be used to produce expansion anchors. Method A costs $60000 initially and will have a $10000 salvage value after 3 years. The operating cost with this method will be $24000 per year. Method B will have a first cost of $110000, an operating cost of $10000 per year, and a $34000 salvage value after its 3-year life. The interest rate for both the methods is 14.00%. Which method should be used on the basis of a present worth analysis? (Include a minus sign if necessary.) The present worth of method A is $[ Method A and that of method B is $[ is selected by the company. One of two methods must be used to produce expansion anchors. Method A costs $60000 initially and will have a $10000 salvage value after 3 years. The operating cost with this method will be $24000 per year. Method B will have a first cost of $110000, an operating cost of $10000 per year, and a $34000 salvage value after its 3-year life. The interest rate for both the methods is 14.00%. Which method should be used on the basis of a present worth analysis? (Include a minus sign if necessary.) The present worth of method A is $[ Method A and that of method B is $[ is selected by the company.

Answer rating: 100% (QA)

To determine which method should be used based on a present worth analysis we need to calculate the ... View the full answer