Question
Halogen-free liquid crystal polymers are used for lead-free soldering without corrosion and maintenance issues. The polymers can be produced by either of two methods. Equipment
Halogen-free liquid crystal polymers are used for lead-free soldering without corrosion and maintenance issues. The polymers can be produced by either of two methods. Equipment for method A costs $70,000 initially and has a $15,000 salvage value after 3 years. The operating cost with this method will be $20,000 per year. Method B will have a first cost of $140,000, an operating cost of $8000 per year, and a $40,000 salvage value after its 3-year life. At an interest rate of 12% per year, which method should be used on the basis of a present worth analysis? Solve using (a) tabulated factors, and (b) a calculator.
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