Solve clearly

D Question 5 9 pts A manufacturer is considering two methods for inspecting planetary gear sets: Method A and Method M. One of these two methods must be chosen. The quality engineer obtained the following cost estimates; salvage values are not expected to change over the life of either method. To evaluate purchases of inspection equipment, the manufacturer uses a present worth analysis with study period of 3 years. The effective interest rate used to compare projects at this company is 2.1778% per quarter. Method A Method M First cost. S 730,000 876,000 Annual maintenance & operating costs, $ per year 109,500 87,600 Salvage value, $ 65,700 78,840 Life, years 4 7 a. What is the effective interest rate per year? [ Select ] b. What is the present worth of the cash flows for Method M that should be used in the analysis? [ Select ] c. The net present worth of the cash flows for Method A is -$956,440. Based on a present worth analysis, which method should the manufacturer select?. ( Select |