You must evaluate the alternatives below to increase plant capacity for manufacturing high-pressure hydraulic hoses. Find the present worth of each alternative at an interest rate of 14% per year, assuming a life of 5 years for both alternatives. Which alternative should be selected and what is its present worth (select the closest value)? Alternative X First Cost $25,000 Maintenance cost, per Year $8,000 Salvage Value $2,500 Option X with a PW--$51.170 Option Y with a PW--$94,620 Option Y with a PW - $55,380 Option X with a PW --$1,170 Y $75,000 $7,000 $8,500

You must evaluate the alternatives below to increase plant capacity for manufacturing high-pressure hydraulic hoses. Find the present worth of each alternative at an interest rate of 14% per year, assuming a life of 5 years for both alternatives. Which alternative should be selected and what is its present worth (select the closest value)? Alternative X First Cost $25,000 Maintenance cost, per Year $8,000 Salvage Value $2,500 Option X with a PW--$51.170 Option Y with a PW--$94,620 Option Y with a PW - $55,380 Option X with a PW --$1,170 Y $75,000 $7,000 $8,500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An engineering analysis by net present worth (NPW) is to be made for the purchase of two devices A and B (both useful life of 10 years. If an 8% interest rate is used, recommend the device to be purchased. Find PWA = $ Find PWB = $ Select Device
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