A new manufacturing line is being built and your team has narrowed it down to 2 options. Which one is the best option using a 20% rate to evaluate each option? Answer the question by entering the amount of savings by choosing the best option. Margin of error: +/- 10 Enter your answer as a positive number representing savings from one option to another. Hint: When you use Net present Worth Analysis you must must LCM of the lives to assess each option over the same period. Option A B Operating First and Salvage Cost Maintenance Value Cost/Yr $18M $5M $25M $3M $4M $6M Life 10 years 20 years

A new manufacturing line is being built and your team has narrowed it down to 2 options. Which one is the best option using a 20% rate to evaluate each option? Answer the question by entering the amount of savings by choosing the best option. Margin of error: +/- 10 Enter your answer as a positive number representing savings from one option to another. Hint: When you use Net present Worth Analysis you must must LCM of the lives to assess each option over the same period. Option A B Operating First and Salvage Cost Maintenance Value Cost/Yr $18M $5M $25M $3M $4M $6M Life 10 years 20 years

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A: Answer;

Question

A new manufacturing line is being built and your team has narrowed it down to
2 options. Which one is the best option using a 20% rate to evaluate each
option? Answer the question by entering the amount of savings by choosing the
best option.
Margin of error: +/- 10
Enter your answer as a positive number representing savings from one option to
another.
Hint: When you use Net present Worth Analysis you must must LCM of the
lives to assess each option over the same period.
Option
A
B
Operating
First and
Salvage
Cost Maintenance Value
Cost/Yr
$18M $5M
$25M $3M
501,025
$4M
$6M
Life
10
years
20
years

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