Question
Problem 1 10 points Company A plans to replace with one of their current equipment with one of the three options shown in the table.
Problem 1 10 points
Company A plans to replace with one of their current equipment with one of the three options shown in the table.
| Option | A | B | C |
| Initial Cost | 200 | 350 | 475 |
| Annual Operation Cost | 450 | 275 | 300 |
| Salvage Value | 75 | 60 | 80 |
| Estimated Life in Year | 20 | 20 | 20 |
Perform PW analysis to figure out which option should company A choose. The rate of return is 8% per year compounded Monthly.
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Project Financing Financial Instruments And Risk Management
Authors: Frank J Fabozzi, Carmel De Nahlik
1st Edition
9811231494, 9789811231490
