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solve it in spreadsheet 1 Leonard, a company that manufactures explosion- proof motors, is considering two alternatives for ex- panding its international export capacity. Option
solve it in spreadsheet
1 Leonard, a company that manufactures explosion- proof motors, is considering two alternatives for ex- panding its international export capacity. Option 1 requires equipment purchases of $900,000 now and $560,000 two years from now, with annual M&O costs of $79,000 in years 1 through 10. Option 2 involves subcontracting some of the production at costs of $280,000 per year beginning now through the end of year 10. Neither option will have a sig- nificant salvage value. Use a present worth analysis to determine which option is more attractive at the company's MARR of 20% per year. (Note: Check out the spreadsheet exercises for new options that Leonard has been offered recently.)Step by Step Solution
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