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Problem 3 10 points Company C is seeking for help to decide this option to choose to upgrade their current bottleneck equipment. There are two
Problem 3 10 points
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 LCM and PW analysis.
- Determine which of the three options is cheaper over a 3 year study period.
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