use MARR = 8%

2. Two engineering designs are directed at improving quality of an existing manufacturing process. Each has no effect on income. Select the recommended method using the annual cost method. X Y First cost $300000 500000 Salvage value 20000 25000 Economic life. 7Yrs 7 Operating cost 25000/yr 10000 Maintenance cost 5000 first increases by 5000/yr 5000 Value of quality Improvement 10000/yr 25000 The value improved is a cash flow in opposite direction of cost