A company wants to automize its production line. Two main technology shortlisted after several studies on the market. If the MARR is 0.1 and the life spans of technology A and B are 3 and 6 years respectively. Answer the following questions by using PW method. Note: all of the cost and revenue units are in thousand dollars. Costs Technology A Technology B First cost, $ -222 -427 Annual Operation Cost, $ -68 -45 Maintenance Cost, $ -14 per Year -31.6 each 2 years Salvage Value, $ 50 98 Life, Year 3 6 a) What is the PW of Technology A? nswer: What is the PW for Technology B? nswer: which Technology will be chosen? Why? (Briefly explain in the Text box below) Note: Attach your handwritten answers here by uploading the file.
A company wants to automize its production line. Two main technology shortlisted after several studies on the market. If the MARR is 0.1 and the life spans of technology A and B are 3 and 6 years respectively. Answer the following questions by using PW method. Note: all of the cost and revenue units are in thousand dollars. Costs Technology A Technology B First cost, $ -222 -427 Annual Operation Cost, $ -68 -45 Maintenance Cost, $ -14 per Year -31.6 each 2 years Salvage Value, $ 50 98 Life, Year 3 6 a) What is the PW of Technology A? nswer: What is the PW for Technology B? nswer: which Technology will be chosen? Why? (Briefly explain in the Text box below) Note: Attach your handwritten answers here by uploading the file.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A company wants to automize its production line. Two main technology shortlisted after several studies on the market. If the MARR is 0.1 and the life spans of
technology A and B are 3 and 6 years respectively. Answer the following questions by using PW method.
Note: all of the cost and revenue units are in thousand dollars.
Costs
Technology A Technology B
First cost, $
-222
-427
Annual Operation Cost, $
-68
-45
Maintenance Cost, $
-14 per Year -31.6 each 2 years
Salvage Value, $
50
98
Life, Year
3
6
a)
What is the PW of Technology A?
Answer:
b)
What is the PW for Technology B?
Answer:
which Technology will be chosen? Why? (Briefly explain in the Text box below)
Note: Attach your handwritten answers here by uploading the file.
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