Question 1:

Question 2.

You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 10% per year? Why is yours the correct choice? The present worth of alternative X is $ and that of alternative Y is $ Alternative is selected by the company. Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $17,000 salvage value after 3 years. The operating cost with this method will be $28,000 in year 1 , increasing by $3800 each year. Method B will have a first cost of $129,000, an operating cost of $8000 in year 1 , increasing by $6500 each year, and a $39,000 salvage value after its 3-year life. At an interest rate of 13% per year, which method should be used on the basis of a present worth analysis? The present worth for method A is $ The present worth for method B is \$ Method I is used to produce expansion anchors