Kadita WaterWorks is a private water company. In line with its vision of expanding and widening...
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Kadita WaterWorks is a private water company. In line with its vision of expanding and widening its service area coverage, it plans to establish a water piping system connection to Vale Springs Subdivision so as to be able to provide the latter with clean water in a fast and efficient way for a long-term period. The company is now considering two piping system and additional information are given as follows: Year 0 1 2 3 4 Pipe System A - $12,500 - $5,000 $5,000 - $5,000 None $2,000 (on 3rd year) Pipe System B $15,000 - $4,000 - $4,000 $4,000 - $4,000 $1,500 (on 4th year) Salvage Value Assume that MARR is 18% and the repeatability assumption is applied. • Using Present Worth Analysis, what is the Present Worth of Pipe System A? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) • Using Present Worth Analysis, what is the Present Worth of Pipe System B? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) • Using Present Worth Analysis, which piping system would you recommend? (Type 'A' for Pipe System A, or 'B' for Pipe System B) Kadita WaterWorks is a private water company. In line with its vision of expanding and widening its service area coverage, it plans to establish a water piping system connection to Vale Springs Subdivision so as to be able to provide the latter with clean water in a fast and efficient way for a long-term period. The company is now considering two piping system and additional information are given as follows: Year 0 1 2 3 4 Pipe System A - $12,500 - $5,000 $5,000 - $5,000 None $2,000 (on 3rd year) Pipe System B $15,000 - $4,000 - $4,000 $4,000 - $4,000 $1,500 (on 4th year) Salvage Value Assume that MARR is 18% and the repeatability assumption is applied. • Using Present Worth Analysis, what is the Present Worth of Pipe System A? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) • Using Present Worth Analysis, what is the Present Worth of Pipe System B? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) • Using Present Worth Analysis, which piping system would you recommend? (Type 'A' for Pipe System A, or 'B' for Pipe System B)
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Correct Answer B Explanation On the basis of PW analysis s... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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