Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $640,000, an operating cost of $66,000 per year, and a salvage value of $80,000 after its 2-year life. Process W will have a first cost of $1,140,000, an operating cost of $25,000 per year, and a $120,000 salvage value after its 4-year life. Process W will also require updating at the end of year 2 at a cost of $90,000. Which process should be selected on the basis of a present worth analysis at a MARR of 12% per year? The present worth of process T IS $- 587076.17 , and the present worth of process W Is $-1058557.93 The process selected on the basis of the present worth analysis is process T x

Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $640,000, an operating cost of $66,000 per year, and a salvage value of $80,000 after its 2-year life. Process W will have a first cost of $1,140,000, an operating cost of $25,000 per year, and a $120,000 salvage value after its 4-year life. Process W will also require updating at the end of year 2 at a cost of $90,000. Which process should be selected on the basis of a present worth analysis at a MARR of 12% per year? The present worth of process T IS $- 587076.17 , and the present worth of process W Is $-1058557.93 The process selected on the basis of the present worth analysis is process T x

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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