Determine which manufacture should be selected on the basis of a present worth comparison if the MARR is 15 % per year. O None of the given answers

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
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Question 1
A national company plan to purchase new machine. Two manufactures offered the estimates below:
Manufacture A
-15,000
-3,600
Manufacture B
First Cost, $
-18,000
-3,100
Annual M&O cost,S per year
Salvage Value,S
Life, years
1000
2000
6
Determine which manufacture should be selected on the basis of a present worth comparison if the MARR is 15 % per year.
O None of the given answers
O Manufacture A should be selected on the basis of a present worth comparison with PW--$42,075
O Manufacture A should be selected on the basis of a present worth comparison with PW -S45,649
O Manufacture B should be selected on the basis of a present worth comparison with PW--$40,344
O Manufacture B should be selected on the basis of a present worth comparison with PW=-$41,383
Transcribed Image Text:es to this answer. Question 1 A national company plan to purchase new machine. Two manufactures offered the estimates below: Manufacture A -15,000 -3,600 Manufacture B First Cost, $ -18,000 -3,100 Annual M&O cost,S per year Salvage Value,S Life, years 1000 2000 6 Determine which manufacture should be selected on the basis of a present worth comparison if the MARR is 15 % per year. O None of the given answers O Manufacture A should be selected on the basis of a present worth comparison with PW--$42,075 O Manufacture A should be selected on the basis of a present worth comparison with PW -S45,649 O Manufacture B should be selected on the basis of a present worth comparison with PW--$40,344 O Manufacture B should be selected on the basis of a present worth comparison with PW=-$41,383
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