Two methods can be used for producing expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Method B will have a first cost of $145,000, an operating cost of $8,000 per year, and a $40,000 salvage value after its 3-year life. At the MARR of 15% per year, which method should be used on the basis of a present worth analysis? The present worth of method A is $- , and the present worth of method B is $- The method to be selected on the basis of a present worth analysis is method (Click to select)✓

Two methods can be used for producing expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Method B will have a first cost of $145,000, an operating cost of $8,000 per year, and a $40,000 salvage value after its 3-year life. At the MARR of 15% per year, which method should be used on the basis of a present worth analysis? The present worth of method A is $- , and the present worth of method B is $- The method to be selected on the basis of a present worth analysis is method (Click to select)✓

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 1.1CE

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