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. Which machine would you select?

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
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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. Which machine would you select?
Machine A
Machine B
1st Cost
$12,000
8000
Operating cost/Yr
3500
2500
Salvage Value
3500
1000
Life
infinite
5
O a. Neither
O b. MAchine B
O c. Machine A
O d. Both
Transcribed Image Text: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. Which machine would you select? Machine A Machine B 1st Cost $12,000 8000 Operating cost/Yr 3500 2500 Salvage Value 3500 1000 Life infinite 5 O a. Neither O b. MAchine B O c. Machine A O d. Both
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Step 1

For machine APW=-Cost-Operating costPA,i,n+Salvage valuePF,i,nPW=-12,000-3500PA,10%,+3500PF,10%,PW=-12,000-350010.1+35000PW=-$47,000option-a

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