Present Worth Method. Show your complete solution and box your answers. A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown ($1 mil- lion units). Which one should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First cost, S -30 0 <-5 -2 Annual cost, $ per year Annual income, $ per year 14 2 Salvage value, $ Life, years 5 3.1 5

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Chapter17: Long-term Investment Analysis
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Show your complete solution.

Present Worth Method. Show your complete solution and box your answers.
A company that manufactures magnetic membrane
switches is investigating two production options.
that have the estimated cash flows shown ($1 mil-
lion units). Which one should be selected on the
basis of a present worth analysis at 10% per year?
In-house
Contract
First cost. S
-30
0
-5
-2
Annual cost, $ per year
Annual income, $ per year
14
Salvage value, $
Life, years
25
3.1
5
Transcribed Image Text:Present Worth Method. Show your complete solution and box your answers. A company that manufactures magnetic membrane switches is investigating two production options. that have the estimated cash flows shown ($1 mil- lion units). Which one should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First cost. S -30 0 -5 -2 Annual cost, $ per year Annual income, $ per year 14 Salvage value, $ Life, years 25 3.1 5
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