Question
A Company is considering three types of tower cranes for the construction of the new mall. The cash flows for the three types are shown
A Company is considering three types of tower cranes for the construction of the new mall. The cash flows for the three types are shown below:
Model | A | B | C
|
Purchase Cost | $10,000 | $20,000 | $30,000 |
Annual Operation Cost | $1,000 | $800 | $1,200 |
Annual Revenue | $2,800 | $3,500 | $4,500 |
Salvage Value | 0 | 5000 | 0 |
Useful Life | 10 Years | 20 Years | 30 Years |
The alternatives could be replaced with another with identical cost and benefits. The MARR is 10%.
a- Which type of crane, should be selected?
b- If the useful life of crane A and Crane B is 30 years, and the two projects will maintain their annual revenue and annual operation cost the same for the whole period and the salvage value for Crane B will be 0 by the end of 30 years, which type of crane, should be selected
Solve it by COMPOUND INTEREST TABLES
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