Question: Two methods can be used for producing expansion anchors. Method A costs $15,000 initially and will have a $5000 salvage value after 3 years. The
Two methods can be used for producing expansion anchors. Method A costs $15,000 initially and will have a $5000 salvage value after 3 years. The operating cost with this method will be $8,000 per year. Method B will have a first cost of $40,000, an operating cost of $2,000 per year, and a $10,000 salvage value after its 6-year life. Interest rate is 10% per year. Using the present worth technique, the present worth of method A is closest to:Note: Use positive sign for costs and negative sign for salvage values
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
