Two methods can be used to produce expansion anchors. Method A costs $70,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $29,000 in year 1, increasing by $4000 each year. Method B will have a first cost of $130,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $40,000 salvage value after its 3-year life. At an interest rate of 14% per year, what are the present worth of Method A and Method B? O a. PWA $-133,655 PWB $-129,647 O b. PWA $-133,655 PWB $-125,178 O C.PWA = $-150,260 PWB $-129,647 O d. PWA $-150,260 PWB = $-125,178

Two methods can be used to produce expansion anchors. Method A costs $70,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $29,000 in year 1, increasing by $4000 each year. Method B will have a first cost of $130,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $40,000 salvage value after its 3-year life. At an interest rate of 14% per year, what are the present worth of Method A and Method B? O a. PWA $-133,655 PWB $-129,647 O b. PWA $-133,655 PWB $-125,178 O C.PWA = $-150,260 PWB $-129,647 O d. PWA $-150,260 PWB = $-125,178

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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