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Required information Problem 05.019 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering
Required information Problem 05.019 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special-purpose Lego parts. Method 1 will have an initial cost of $340,000, an annual operating cost of 1 $120,000, and a life of 3 years. Method 2 will have an initial cost of $740,000, an operating cost of $110,000 per year, and a 6-year life. Assume 15% salvage values for both methods. Lego uses an MARR of 11% per year. Problem 05.019.b Alternative Comparison - Different Lives If the evaluation is incorrectly performed using the respective life estimates of 3 and 6 years, will Lego make a correct or incorrect economic decision? Explain your answer. The present worth of method 1 is $ and that of method 2 is $| Method (Click to select) is selected
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