Question: Two methods can be used to produce expansion anchors. Method A costs $85.000 initially and will have a $17.000 solvage value after 3 years. The
Two methods can be used to produce expansion anchors. Method A costs $85.000 initially and will have a $17.000 solvage value after 3 years. The operating cost with this method will be $39,000 in year 1, increasing by $4000 each year, Method B will have a first cost of $110,000, an operating cost of $10000 in year 1. Increasing by $10000 each year, and a $50,000 salvage value after its 3-year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis? The present worth for method A is $ The present worth for method B is $ Method (Click to select) is used to produce expansion anchors
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