Material XX Material ZZ First cost, $ -230,000 - 380,000 Maintenance cost, $/year -9,000 - 12,000 Salvage value, $ Life, years 12,000 140,000 3 6
Material XX Material ZZ First cost, $ -230,000 - 380,000 Maintenance cost, $/year -9,000 - 12,000 Salvage value, $ Life, years 12,000 140,000 3 6
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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Question
A metallurgical engineer is considering the two ceramics estimated below for use in a hightemperature annealing furnace. (a) Which should be selected on the basis of a present worth comparison at an interest rate of 12% per year? (b) If the life of material XX is increased from 3 to 4 years, determine the number of re-purchases for both alternatives necessary for a present worth analysis based on the equal-service requirement.
Transcribed Image Text:Material XX Material ZZ
First cost, $
-230,000
- 380,000
Maintenance cost, $/year
-9,000
- 12,000
Salvage value, $
Life, years
12,000
140,000
3
6
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