A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: First cost Additional investment after 3 years Salvage Value Annual operating cost Annual labor cost Туре 1 300,000 100,000 30,000 45,000 60,000 3% 4% Type 2 500,000 75,000 50,000 38,000 45,000 3% 4% Insurance and property taxes Payroll taxes Estimated life If the rate is 15%, which equipment should be selected on the basis of comparing their individual 15 15 Present Worth?
A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: First cost Additional investment after 3 years Salvage Value Annual operating cost Annual labor cost Туре 1 300,000 100,000 30,000 45,000 60,000 3% 4% Type 2 500,000 75,000 50,000 38,000 45,000 3% 4% Insurance and property taxes Payroll taxes Estimated life If the rate is 15%, which equipment should be selected on the basis of comparing their individual 15 15 Present Worth?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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SUBJECT: ENGINEERING ECONOMY
TOPIC: BASIC METHODS IN MAKING ECONOMY STUDIES
NOTES:
- USE 2 DECIMAL PLACES ONLY
- BOX THE FINAL ANSWERS
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Transcribed Image Text:A company is considering two types of equipment for its manufacturing plant. Pertinent data are as
follows:
First cost
Additional investment after 3 years
Salvage Value
Annual operating cost
Annual labor cost
Insurance and property taxes
Payroll taxes
Estimated life
If the rate is 15%, which equipment should be selected on the basis of comparing their individual
Present Worth?
Туре 1
300,000
100,000
30,000
45,000
60,000
3%
4%
Type 2
500,000
75,000
50,000
38,000
45,000
3%
4%
15
15
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