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)✓

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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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)✓
Transcribed Image Text: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)✓
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