A company plans to purchase new cut-and-finish equipment. Two manufacturers offered the estimates as following: Vendor A has a first cost of $15,000, an annual operating cost of $3,500, a salvage value of $1000, and a service life of 6 years. Vendor B has a first cost of $18,000, an annual operating cost of $3,100, a salvage value of $2,000, and a service life of 9 years. If a study period of 5 years is used and the salvage values are not expected to change, which vendor should be selected? -$26,236, A -$26,636, A -$25,336, A -$24,666, B O O

A company plans to purchase new cut-and-finish equipment. Two manufacturers offered the estimates as following: Vendor A has a first cost of $15,000, an annual operating cost of $3,500, a salvage value of $1000, and a service life of 6 years. Vendor B has a first cost of $18,000, an annual operating cost of $3,100, a salvage value of $2,000, and a service life of 9 years. If a study period of 5 years is used and the salvage values are not expected to change, which vendor should be selected? -$26,236, A -$26,636, A -$25,336, A -$24,666, B O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ee 353.
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