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Kadita WaterWorks is a private water company. In line with its vision of expanding and widening its service area coverage, it plans to establish
Kadita WaterWorks is a private water company. In line with its vision of expanding and widening its service area coverage, it plans to establish a water piping system connection to Vale Springs Subdivision so as to be able to provide the latter with clean water in a fast and efficient way for a long-term period. The company is now considering two piping system and additional information are given as follows: Year 0 1 2 3 4 Pipe System A - $12,500 - $5,000 $5,000 - $5,000 None $2,000 (on 3rd year) Pipe System B $15,000 - $4,000 - $4,000 $4,000 - $4,000 $1,500 (on 4th year) Salvage Value Assume that MARR is 18% and the repeatability assumption is applied. Using Present Worth Analysis, what is the Present Worth of Pipe System A? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) Using Present Worth Analysis, what is the Present Worth of Pipe System B? Assume that your final numerical answers is rounded off up to 2 decimal places and is in terms of dollars.) Using Present Worth Analysis, which piping system would you recommend? (Type 'A' for Pipe System A, or 'B' for Pipe System B)
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