Using the PW analysis on the basis of their capitalized cost to compare the Mutually Exclusive (ME) alternatives below at a rate of 10% per year. What is the capitalized cost of machine В? Machine A Machine B 1st Cst $12,000 8000 Operating cost/Yr 3500 2500 Salvage Value 3500 1000 Life infinite 5 O a. S+33.000 O b. $-44,466 O. S-47,000 O d. S-42,580

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
Section: Chapter Questions
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Using the Present Worth (PW) analysis on the basis of their capitalized cost to compare the Mutually Exclusive (ME) alternatives below at a rate of 10% per year. What is the capitalized cost of machine B?

|                | Machine A | Machine B |
|----------------|-----------|-----------|
| 1st Cost       | $12,000   | $8,000    |
| Operating cost/yr | $3,500   | $2,500    |
| Salvage Value  | $3,500    | $1,000    |
| Life           | Infinite  | 5         |

Options:
- a. $33,000
- b. $44,466
- c. $47,000
- d. $42,580
Transcribed Image Text:Using the Present Worth (PW) analysis on the basis of their capitalized cost to compare the Mutually Exclusive (ME) alternatives below at a rate of 10% per year. What is the capitalized cost of machine B? | | Machine A | Machine B | |----------------|-----------|-----------| | 1st Cost | $12,000 | $8,000 | | Operating cost/yr | $3,500 | $2,500 | | Salvage Value | $3,500 | $1,000 | | Life | Infinite | 5 | Options: - a. $33,000 - b. $44,466 - c. $47,000 - d. $42,580
Expert Solution
Step 1

First cost is also equal to the Replacement cost .

Replacement cost : 

It is the cost that has to be pay for replacing the present machine  

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