A metallurgical engineer is considering the two ceramics estimated below for use in a hightemperature annealing furnace.

(a) Which should be selected on the basis of a present worth comparison at an interest rate of 12% per year?

(b) If the life of material XX is increased from 3 to 4 years, determine the number of re-purchases for both alternatives necessary for a present worth analysis based on the equal-service requirement.

Material XX Material ZZ First cost, $ 230,000 380,000 Maintenance cost, $/year 9,000 12,000 Salvage value, $ 12,000 140,000 Life, years 3 6