An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $30,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $73,000 to buy and will have an AOC of $9,500 over its 4-year service life. Method C costs $137,000 initially with an AOC of $4,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 9% of its first cost. Problem 05.030.a Future Worth Analysis Perform a future worth analysis to select the method at i = 10% per year. The future worth of method A is $ The future worth of method B is $ The future worth of method C is $ Method is selected.
An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $30,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $73,000 to buy and will have an AOC of $9,500 over its 4-year service life. Method C costs $137,000 initially with an AOC of $4,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 9% of its first cost. Problem 05.030.a Future Worth Analysis Perform a future worth analysis to select the method at i = 10% per year. The future worth of method A is $ The future worth of method B is $ The future worth of method C is $ Method is selected.
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Problem 05.030 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS
An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has
an estimated first cost of $30,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will
cost $73,000 to buy and will have an AOC of $9,500 over its 4-year service life. Method C costs $137,000 initially with an
AOC of $4,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth
9% of its first cost.
Problem 05.030.a Future Worth Analysis
Perform a future worth analysis to select the method at i= 10% per year.
The future worth of method A is $
The future worth of method B is $
The future worth of method C is $
Method
is selected.
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