A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown (RM 1 million units). Suggest which alternative should be selected with 10% interest rate using present worth analysis. In house Contract First cost, RM Annual Cost, RM per year Annual income, RM per year Salvage value, RM Life, years 30 5 2 14 3.1 5 5

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Subject : Economy and Engineering Management

A company that manufactures magnetic membrane switches is investigating two production
options that have the estimated cash flows shown (RM 1 million units). Suggest which
alternative should be selected with 10% interest rate using present worth analysis.
In house
Contract
First cost, RM
Annual Cost, RM per year
Annual income, RM per year
Salvage value, RM
Life, years
30
5
2
14
3.1
5
5
Transcribed Image Text:A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown (RM 1 million units). Suggest which alternative should be selected with 10% interest rate using present worth analysis. In house Contract First cost, RM Annual Cost, RM per year Annual income, RM per year Salvage value, RM Life, years 30 5 2 14 3.1 5 5
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