You are the design consultant comparing two pump options. The first option has an installation cost of $34,000 and lasts 40 years with $1,000 maintenance every 10 years. The second option has an installation cost of $30,000 and lasts 40 years if a large refurbishment of $15,000 is conducted after 20 years. Assuming a 4% MARR, Pv option 1 pv option 2 which option is the best

You are the design consultant comparing two pump options. The first option has an installation cost of $34,000 and lasts 40 years with $1,000 maintenance every 10 years. The second option has an installation cost of $30,000 and lasts 40 years if a large refurbishment of $15,000 is conducted after 20 years. Assuming a 4% MARR, Pv option 1 pv option 2 which option is the best

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

You are the design consultant comparing two pump options. The first option has an installation cost of $34,000 and lasts 40 years
with $1,000 maintenance every 10 years. The second option has an installation cost of $30,000 and lasts 40 years if a large
refurbishment of $15,000 is conducted after 20 years.
Assuming a 4% MARR,

Pv option 1

pv option 2

which option is the best

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