3. Carp, Inc. wants to evaluate two methods of packaging their products. Use an interest rate of 15% and annual cash flow analysis to decide which is the most desirable alternative. First cost O&M costs (yr 1) 18,000 + Cost gradient Annual benefit Salvage value Useful life, in years 10 A B S700,000 $1,700,000 29,000 + 900/yr + 750/yr 154,000 303,000 142,000 210,000 20
3. Carp, Inc. wants to evaluate two methods of packaging their products. Use an interest rate of 15% and annual cash flow analysis to decide which is the most desirable alternative. First cost O&M costs (yr 1) 18,000 + Cost gradient Annual benefit Salvage value Useful life, in years 10 A B S700,000 $1,700,000 29,000 + 900/yr + 750/yr 154,000 303,000 142,000 210,000 20
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![3. Carp, Inc. wants to evaluate two methods of
packaging their products. Use an interest rate of 15%
and annual cash flow analysis to decide which is the
most desirable alternative.
First cost
O&M costs (yr 1) 18,000
+ Cost gradient
Annual benefit
Salvage value
Useful life, in years 10
A B
|S700,000 $1,700,000
29,000
+ 900/yr + 750/yr
154,000 303,000
142,000 210,000
20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e7931e3-c532-4440-b77b-3f956e8573e1%2F9739a23e-8af3-47ab-9b35-a024ed1fbe7c%2Fuzfdts_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. Carp, Inc. wants to evaluate two methods of
packaging their products. Use an interest rate of 15%
and annual cash flow analysis to decide which is the
most desirable alternative.
First cost
O&M costs (yr 1) 18,000
+ Cost gradient
Annual benefit
Salvage value
Useful life, in years 10
A B
|S700,000 $1,700,000
29,000
+ 900/yr + 750/yr
154,000 303,000
142,000 210,000
20
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