For your new laboratory, you plan to purchase energy efficient freezers. There are two models in the market: Model X costs $100,000, and you need two units of model X for your project. Maintaining costs would be $50,000 and decreasing by $15,000 for each unit per year. Each freezer can be used for four years. At the end of which time, you estimate that the salvage value will be $70,000 for both freezers. Model Y costs $250,000 each. The maintaining cost of this model would be $10,000 per year and it would be decreasing by $5,000 starting in year 3. The salvage value of both model Y at the end of seven years is $60,000. Once again, two units of model Y is required for your project. Since you must complete the project in two years, you estimated that, the model X could be sold for $50,000 each and the model Y for $150,000 each after two years. Find the present worth difference between two models using MARR=10%.

Question 3 options:

a)

Between $32,240 and $33,100

b)

Between $24,240 and $25,100

c)

Between $30,240 and $31,100

d)

Between $22,240 and $23,100

e)

None of the answers are correct

f)

Between $20,240 and $21,100