Please solve this question. A material testing laboratory has two alternatives for purchasing a compression testing machine which will be used for determining the compressive strength of different construction materials. The alternatives are from two different manufacturing companies. The cash flow details of the alternatives are as follows; Alternative-1: Initial purchase price = Rs.1,000,000, Annual operating cost = Rs.10,000, Expected annual income to be generated from testing of different construction materials = Rs.175,000, Expected salvage value = Rs.200,000, Useful life = 10 years. Alternative-2: Initial purchase price = Rs.700,000, Annual operating cost = Rs.15,000, Expected annual income to be generated from testing of different construction materials = Rs.165,000, Expected salvage value = Rs.250,000, Useful life = 5 years. Evaluate the alternatives by using present worth method for selection of the most economical one at the interest rate of 10% per year.
Please solve this question. A material testing laboratory has two alternatives for purchasing a compression testing machine which will be used for determining the compressive strength of different construction materials. The alternatives are from two different manufacturing companies. The cash flow details of the alternatives are as follows; Alternative-1: Initial purchase price = Rs.1,000,000, Annual operating cost = Rs.10,000, Expected annual income to be generated from testing of different construction materials = Rs.175,000, Expected salvage value = Rs.200,000, Useful life = 10 years. Alternative-2: Initial purchase price = Rs.700,000, Annual operating cost = Rs.15,000, Expected annual income to be generated from testing of different construction materials = Rs.165,000, Expected salvage value = Rs.250,000, Useful life = 5 years. Evaluate the alternatives by using present worth method for selection of the most economical one at the interest rate of 10% per year.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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A material testing laboratory has two alternatives for purchasing a compression testing machine which will be used for determining the compressive strength of different construction materials. The alternatives are from two different manufacturing companies. The cash flow details of the alternatives are as follows;
Alternative-1: Initial purchase price = Rs.1,000,000, Annual operating cost = Rs.10,000, Expected annual income to be generated from testing of different construction materials = Rs.175,000, Expected salvage value = Rs.200,000, Useful life = 10 years. Alternative-2: Initial purchase price = Rs.700,000, Annual operating cost = Rs.15,000, Expected annual income to be generated from testing of different construction materials = Rs.165,000, Expected salvage value = Rs.250,000, Useful life = 5 years. Evaluate the alternatives by using present worth method for selection of the most economical one at the interest rate of 10% per year.
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