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You have been asked to evaluate two alternatives X and Y, that may increase plant capacity for manufacturing high pressure hydraulic hoses. The parameters associated
You have been asked to evaluate two alternatives X and Y, that may increase plant capacity for manufacturing high pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 11% per year? Why is yours the correct choice? Alternative First Cost Maintenance cost, per Year Salvage Value Life $ 40,000 $-13000 Y $-75,000 $ 8000 $3,000 5 years $8,500 5 years The present worth of alternative X is $ and that of alternative Y is $ Alternative X is selected by the company
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