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Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $11,000 salvage value after 3 years. The
Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $11,000 salvage value after 3 years. The operating cost with this method will be $21,000 in year 1 increasing by $2200 each year. Method B will have a first cost of $101,000, an operating cost of $7000 in year 1 increasing by $7000 each year, and a $31,000 salvage value after its 3-year life. At an interest rate of 9% per year, which method should be used on the basis of a present worth analysis? The present worth for method A is $ The present worth for method B is $O Method (Click to select) is used to produce expansion anchors
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