Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years than it is after five years. If the MARR is 9% per year determine: The annual worth of Method 2, (in $) Round off to the nearest two (2) decimal places, include sign
Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years than it is after five years. If the MARR is 9% per year determine: The annual worth of Method 2, (in $) Round off to the nearest two (2) decimal places, include sign
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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12. Solve the given question and give the correct answer.
![Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an
AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and
a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the
analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years
than it is after five years. If the MARR is 9% per year determine:
The annual worth of Method 2, (in $)
Round off to the nearest two (2) decimal places, include sign](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdbc2ca69-a20a-4b4d-9994-19a36a2ea541%2F81b21d9e-427c-449f-9730-4b708bbd5bc8%2Falo5z1v_processed.png&w=3840&q=75)
Transcribed Image Text:Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an
AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and
a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the
analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years
than it is after five years. If the MARR is 9% per year determine:
The annual worth of Method 2, (in $)
Round off to the nearest two (2) decimal places, include sign
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