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The 18 overhead doors on your loading dock must be replaced now. The deluxe model costs $2,200 each and will last for six years. The
The 18 overhead doors on your loading dock must be replaced now. The deluxe model costs $2,200 each and will last for six years. The standard model costs $1,800 each and will last for four years. The deluxe model is aluminum, so it will have a scrap value of $150 at the end of its life. The standard model is plastic and has no scrap value. The use of the deluxe model on the loading dock will also save your company $1,000 per year in heating costs because of its ability to seal better. If you use an interest rate of 12% and present worth analysis, which door will you recommend? Prepare the following information: Options Comparison Table Cash Flow Diagrams Show all calculations Conclusion: which door is to be recommended? Instructions: The 16 overhead doors on your loading dock must be replaced now. The deluxe model costs $2,200 each and will last for six years. The standard model costs $1,600 each and will last for four years. The deluxe model is aluminum, so it will have a scrap value of $150 at the end of its life. The standard model is plastic and has no scrap value. The use of the deluxe model on the loading dock will also save your company $1,000 per year in heating costs because of its ability to seal better. If you use an interest rate of 12% and present worth analysis, which door will you recommend? Prepare the following information: Calculations: Options Comparison Table Initial Cost: $2,200 deluxe model each cost *16 overhead doors = $35,200 . Cash Flow Diagrams Scrap Value at end life: scrap value of $150 * 16 overhead doors = $2,400 Show all calculations 6th year = $1000 saved per year + $2,400 end life Scrap value = $3,400 Conclusion: which door is to be recommended? . Handwritten submittals will not be accepted. The Cash Flow Diagram for Deluxe Model $1,000 $1,000 $1,000 $1,000 $1,000 $3,400 Initial cost $35.200 The Cash Flow Diagram for Standard Model Calculations Initial Cost: $1600 standard model cost x 16 overhead doors = $25,600 2 4 Initial Cost $25,600
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