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Please see answer below. Can someone please explain how to get the answer with excel? Company C is seeking for help to decide this option
Please see answer below. Can someone please explain how to get the answer with excel?
Company C is seeking for help to decide this option to choose to upgrade their current bottleneck equipment. There are two vendors and one rental option. The cost details are shown in the table below.
| Option | Vender R | Vender T | Rental |
| Initial Cost | 75000 | 125000 | 0 |
| Annual Operation Cost | 28000 | 12000 | 52000 |
| Salvage Value | 0 | 30000 | 0 |
| Estimated Life in Year | 2 | 3 | Maximum 3 years |
MARR = 10% per year compounded monthly.
- Select from the two sales vendors using the AW analysis.
- Determine which of the three options is cheaper over a 3-year study period.
| P3 | ||||
| PP - Year | ||||
| CP- Month | ||||
| Time Window - Year | ||||
| Year | R | T | ||
| PMT | ($71,487.79) | ($53,659.67) | ||
| Winner | ||||
| 2 | T vs. Rental | |||
| T | Rental | |||
| PMT | ($71,487.79) | AW= | $ (52,000.00) | |
| Winner |
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