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Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special - purpose Lego parts. Method 1

Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special-purpose Lego parts. Method 1 will have an initial cost of $350000, an annual operating cost of $105000, and a life of 3 years. Method 2 will have an initial cost of $550000, an operating cost of $130000 per year, and a 6-year life. Assume 10.00% salvage values for both methods. Lego uses an MARR of 13.00% per year.

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