Question: Solve Problem 2.23 using an AC analysis instead of a PW analysis. Problem 2.23 The Automated Assembly Company is considering three different methods for assembly

Solve Problem 2.23 using an AC analysis instead of a PW analysis.

Problem 2.23

The Automated Assembly Company is considering three different methods for assembly of parts in a production line. Method 1 has an initial cost of $40,000, an annual cost of $9,000, and a two-year life. Method 2 has an initial cost of $80,000, with a 4-year life and an annual operating cost of $6,000. Method 3 is a longer-life alternative, lasting 8 years with an initial cost of $160,000 and annual operating costs of $2,000. Methods 1 and 2 have no salvage value. However, the equipment used in Method 3 can be sold for $12,000 at the end of its life. The MARR is 12%.
Determine which method should be selected based on a PW analysis.

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