1.A company have to choose the type of electrical generator to sustain its production oper in case of power failures. Type A Type B First Cost P200,000 P300,000 Annual Operations Cost P 32,000 P 24,000 Annual Labor Cost P 50,000 P 32,000 Insurance & Taxes 3% of First Cost 3% of First Cost Payroll taxes 4% of first Cost 4% of first Cost Estimated Life 10 yrs 10 yrs Note: All the Types of Genset will depreciate. If the minimum required rate of return is 15%, which type of genset should be selected? Using Present Worth Method, which type should be selected?

1.A company have to choose the type of electrical generator to sustain its production oper in case of power failures. Type A Type B First Cost P200,000 P300,000 Annual Operations Cost P 32,000 P 24,000 Annual Labor Cost P 50,000 P 32,000 Insurance & Taxes 3% of First Cost 3% of First Cost Payroll taxes 4% of first Cost 4% of first Cost Estimated Life 10 yrs 10 yrs Note: All the Types of Genset will depreciate. If the minimum required rate of return is 15%, which type of genset should be selected? Using Present Worth Method, which type should be selected?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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