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Please solve in details. Please note that the interest rate is 10% compounded semi-annually and Method Y operating costs are $12, 000 every 6 months.
Please solve in details. Please note that the interest rate is 10% compounded semi-annually and Method Y operating costs are $12, 000 every 6 months.
Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, bathroom fans, dryers, and other building air exhausts, can be made by two different methods. Method X will have a first cost of $75,000, an operating cost of $32,000 per year, and $9000 salvage value after 4 years. Method Y will have a first cost of $140,000, an operating cost of $12,000 every 6 months, and a $19,000 salvage value after its 4-year life. At an interest rate of 10% compounded semi- annually, which method should be used on the basis of an annual worth analysis
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