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If the MARR is 10% per year, use the present worth (PW) analysis (using the LCM approach) to recommend the most appropriate boiler.

If the MARR is 10% per year, use the present worth (PW) analysis (using the LCM approach) to recommend the most appropriate boiler.

Essentials Of Investments
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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Your plant must add another boiler to its steam generating system. Bids have been obtained from two boiler manufacturers as follows: Boiler A Boiler B Initial investment $40,000 * $32,000 Salvage value $9,000 $500 $7,000, increasing by $1,000 per Annual operating costs $3,000 year after the first year Useful life, N 10 years 5 years If the MARR is 10% per year, use the present worth (PW) analysis (using the LCM approach) to recommend the most appropriate boiler.
Transcribed Image Text:Your plant must add another boiler to its steam generating system. Bids have been obtained from two boiler manufacturers as follows: Boiler A Boiler B Initial investment $40,000 * $32,000 Salvage value $9,000 $500 $7,000, increasing by $1,000 per Annual operating costs $3,000 year after the first year Useful life, N 10 years 5 years If the MARR is 10% per year, use the present worth (PW) analysis (using the LCM approach) to recommend the most appropriate boiler.
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