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All work is correct. Please just help me with wording of the last question on this sheet. Thanks! 3. (6 points) A hotel operator is
All work is correct. Please just help me with wording of the last question on this sheet. Thanks!
3. (6 points) A hotel operator is considering replacing an old piece of equipment with a new one. He has provided you with the following information concerning three alternative equipment models. Initial equipment cost [5 year life] Residual value Initial vear installation costs Initial training costs Annual maintenane cost Model l $12,500 1.200 200 400 350 400 350 Model 2 $11,900 900 250 400 250 300 350 Model 3 $13,500 1.100 200 350 450 350 350 Annual eainment enerov costs 1) Show your calculation in the following tables based on two methods discussed on page 303 305 Method 1 Initial Costs vear 1 Initial Equipment Cost Initial Installation Cost Initial Training Cost First Year Costs Model 1 $12,500 $200 $400 $13,100 Model 2 $11,900 S250 $400 $12,550 Model 3 $13,500 S200 $350 $14,050 Recurring Inclusive Costs Years 1-5 Maintenance ($350x5) (S250x5) (S450x5) Supplies ($400x5) (S300x5) (S350x5) Less: Equipment Residual Values Total Recurring inclusive costs years 1-5 $1,750 $2,000 (1,200) $2,550 $1,250 $1,500 (900) $1,850 $2,250 $1,750 (1,100) $2,900Step by Step Solution
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