Question 1 An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $9000, and a service life of 2 years. Method B will cost $80,000 to buy and will have an AOC of $6000 over its 4-year service life. Method C costs $130,000 initially with an AOC of $4000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 10% of its first cost. Perform both (a) future worth, and (b) present worth analyses to select the method at i = 10% per year. Question 2 Feng Seawater Desalination Systems has established a capital investment limit of $800,000 for next year for projects that target improved recovery of highly brackish groundwater. All projects have a 4-year life and the MARR is 10% per year. (a) Select any or all of the projects. (b) Project Z is a favorite of Mr. Feng. Determine the minimum NCF necessary to make Z the economically best project. (c) Use a spreadsheet to answer the two parts above. Project X Y Initial Investment, $ 250,000 -300,000 -550.000 Net Cash Flow, $/Year 50,000 90,000 150,000 Salvage Value, $ 45,000 -10,000 100,000