Production equipment is bought at an initial price of $10,000. The annual operation and maintenance cost is $100. The salvage value at the end of the 15-year life is $500. Using MARR of 10%, calculate the net present worth. Another model of the equipment with the same initial price and annual cost brings in an income of $1,100 per year but has no salvage value at the end of its 15-year life. As an investor, would you invest in a or b? Why?

Answer rating: 100% (QA)

Equipment 1 Initial price 10000 Annual operations and maintenance cost100 Salvage v... View the full answer