Required information Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special-purpose Lego parts. Method 1 will have an initial cost of $430000, an annual operating cost of $145000, and a life of 3 years. Method 2 will have an initial cost of $630000, an operating cost of $140000 per year, and a 6-year life. Assume 10.00% salvage values for both methods. Lego uses an MARR of 14.00% per year. Which method should it select on the basis of a present worth analysis? (Include a minus sign if necessary.) The present worth of method 1 is $[ Method (Click to select) is selected. (Click to select) 1 2 and that of method 2 is S

Required information Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special-purpose Lego parts. Method 1 will have an initial cost of $430000, an annual operating cost of $145000, and a life of 3 years. Method 2 will have an initial cost of $630000, an operating cost of $140000 per year, and a 6-year life. Assume 10.00% salvage values for both methods. Lego uses an MARR of 14.00% per year. Which method should it select on the basis of a present worth analysis? (Include a minus sign if necessary.) The present worth of method 1 is $[ Method (Click to select) is selected. (Click to select) 1 2 and that of method 2 is S

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Required information
Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is
considering two methods for producing special-purpose Lego parts. Method 1 will have an initial
cost of $430000, an annual operating cost of $145000, and a life of 3 years. Method 2 will have
an initial cost of $630000, an operating cost of $140000 per year, and a 6-year life. Assume
10.00% salvage values for both methods. Lego uses an MARR of 14.00% per year.
Which method should it select on the basis of a present worth analysis? (include a minus sign if necessary.)
The present worth of method 1 is $
Method (Click to select) is selected.
(Click to select)
1
2
and that of method 2 is $

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