Question: Problem 1 10 points Company A plans to replace with one of their current equipment with one of the three options shown in the table.

Problem 1 10 points

Company A plans to replace with one of their current equipment with one of the three options shown in the table.

Option

A

B

C

Initial Cost

200

350

475

Annual Operation Cost

450

275

300

Salvage Value

75

60

80

Estimated Life in Year

20

20

20

Perform PW analysis to figure out which option should company A choose. The rate of return is 8% per year compounded Monthly.

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