You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 11.00% per year? Why is yours the correct choice? (Include a minus sign if necessary.) Alternative First Cost $-30000 Maintenance cost, per $-15000 Year Salvage Value $3000 Life 5 years Y $-75000 $-5000 $4000 5 years The present worth of alternative X is $ and that of alternative Y is $ Alternative (Click to select) is selected by the company. (Click to select) Y
You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 11.00% per year? Why is yours the correct choice? (Include a minus sign if necessary.) Alternative First Cost $-30000 Maintenance cost, per $-15000 Year Salvage Value $3000 Life 5 years Y $-75000 $-5000 $4000 5 years The present worth of alternative X is $ and that of alternative Y is $ Alternative (Click to select) is selected by the company. (Click to select) Y
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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Transcribed Image Text:You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic
hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present
worth comparison at an interest rate of 11.00% per year? Why is yours the correct choice? (Include a minus sign if necessary.)
Alternative
First Cost
$-30000
Maintenance cost, per
$-15000
Year
Salvage Value
$3000
Life
5 years
Y
$-75000
$-5000
$4000
5 years
The present worth of alternative X is $
and that of alternative Y is $
Alternative (Click to select) is selected by the company.
(Click to select)
Y
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