Draw cash flow diagrams with symbols. Show your work using conversion factor notations. You need actual calculations to make a decision 1. The manager of engineering at the 900-megawatt Hamilton Nuclear Power Plant has three options to supply personal safety equipment to employees. Two are vendors who sell the items, and a third will rent the equipment for $50,000 per year, but for no more than 3 years per contract. These items have relatively short lives due to constant use. The MARR is 10% per year. Vendor R Vendor T Rental Initial cost, $ -75,000 -125,000 Annual upkeep cost, $/year -27,000 -12,000 Annual rentalcost, $ per year -50,000 Salvage value, $ 30,000 Estimated life, 3 Maximum years of 3
Draw cash flow diagrams with symbols. Show your work using conversion factor notations. You need actual calculations to make a decision 1. The manager of engineering at the 900-megawatt Hamilton Nuclear Power Plant has three options to supply personal safety equipment to employees. Two are vendors who sell the items, and a third will rent the equipment for $50,000 per year, but for no more than 3 years per contract. These items have relatively short lives due to constant use. The MARR is 10% per year. Vendor R Vendor T Rental Initial cost, $ -75,000 -125,000 Annual upkeep cost, $/year -27,000 -12,000 Annual rentalcost, $ per year -50,000 Salvage value, $ 30,000 Estimated life, 3 Maximum years of 3
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:Draw cash flow diagrams with symbols.
Show your work using conversion factor
notations. You need actual calculations to
make a decision
1. The manager of engineering at the 900-megawatt Hamilton Nuclear
Power Plant has three options to supply personal safety equipment to
employees. Two are vendors who sell the items, and a third will rent the
equipment for $50,000 per year, but for no more than 3 years per
contract. These items have relatively short lives due to constant use. The
MARR is 10% per year.
Vendor R
Vendor T
Rental
Initial cost, $
-75,000
-125,000
Annual upkeep cost, $/year -27,000
-12,000
Annual rentalcost, $ per year
-50,000
Salvage value, $
30,000
Estimated life,
2
3
Maximum years of 3
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