A manufacturer is exploring changing the raw material transportation system in the production area from a trolley system to a conveyor belt system. The company's MARR is 15% per year on its investments and a transportation system will be needed for 15 years. Using present value analysis, what decision would you make?

trolleys (Alt.A) vs conveyor belts (Alt.B)

Initial cost $ 0 $ 35,000

Annual maintenance cost 500 900

Annual labor cost 1500 100

Annual profits 3,000 12,000

Residual value 0 0

Useful life (years) 15 5

Fill in the blanks:

1.The present value of alternative A to do the analysis is $

2. The present value of alternative B to do the analysis is $

3. The selected alternative is Answer

(AoB).

carritos(Alt.A) cintas transportadoras(Alt.B) $0 $35,000 500 900 1500 100 3000 12000 0 0 15 5