Question: Please pay attention to the significant figures while solving the question. It is the difference between a right answer and a wrong answer Derek has
Please pay attention to the significant figures while solving the question. It is the difference between a right answer and a wrong answer
Derek has two choices for a heat-loss prevention system for the shipping doors at Kirkland Manufacturing. He can isolate the shipping department from the rest of the plant, or he can curtain off each shipping door separately. Isolation consists of building a permanent wall around the shipping area. It will cost $60,000 and will save $10,000 in heating costs per year. Plastic curtains around each shipping door will have a total cost of about $6,000, but will have to be replaced about once every two years. Savings in heating costs for installing the curtains will be about $3,000 per year. Use the payback period method to determine which alternative is better. Select the correct choice below, and fill in the answer boxes to complete your choice. (Round to two decimal places as needed.) O A. The isolation alternative has a payback period of years, and the curtains alternative has a payback period of years. Therefore, the isolation alternative is better. OB. The isolation alternative has a payback period of years, and the curtains alternative has a payback period of years. Therefore, both options should be used. O C. The isolation alternative has a payback period of years, and the curtains alternative has a payback period of years. However, it is not appropriate to use the payback period to compare these alternatives. OD. The isolation alternative has a payback period of years, and the curtains alternative has a payback period of years. Therefore, the curtains alternative better
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
