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GIVEN: You are considering the purchase of a new bulldozer for your construction business, and are considering the offering from two different manufacturers, with the estimates as shown in the table here. You must decide if each entry should have a positive or negative sign in your analysis. The interest rate is 6%/year. ITEM: BRAND A BRAND B First Cost, $ M&O Cost, $/Yr. Salvage Value, $ Life, years 250,000 20,000 50,000 6 125,000 25,000 30,000 3 PART 1: FIND: Using an Annual Worth analysis, which brand should be selected on an economic basis? Include a CASH FLOW diagram in your solution for each alternative. ANSWERS: A) Brand A B) Brand B C) They are equivalent, you could pick either D) Not enough information to determine SOLUTION: FIND: At what salvage value for Brand A would the alternatives be equivalent? Pick the answer closest to your calculations. ANSWERS: A) $40,000 B) $59,000 C) $70,000 D) $79,000 SOLUTION