A manufacturing company is deciding between three maintenance plans for a new wa
ID: 1100265 • Letter: A
Question
A manufacturing company is deciding between three maintenance plans for a new waste management system. Plan A needs a single prepayment of $59,000 at the beginning of the year and the contract needs to be renewed every 3 years. Plan B is a two-year contract and requires a payment of $19,470 at the end of year 1 and another payment of $20,060 at the end of year 2. Plan C provides a three-year services with two payments of $29,500 made at the end of years 1 and 3. Which maintenance plan should be selected? Assume the company uses a MARR of 11% and a study period of 6 years.
Plan A
Plan B
Plan C
1.Plan A
2.Plan B
3.Plan C
Explanation / Answer
Plan A
1.Plan A
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