EC2 SU18 Help Save& ExitSubmi You have been asked to evaluate two alternatives,

Question

EC2 SU18 Help Save& ExitSubmi You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing hoses. The parameters associated with each alternative worth comparison at an interest rate of 10% per year? why is yours the correct choice? ssure hydraulic have been estimated. Which one should be selected on the basis of a present $-35,000 $-10000 $3,500 5 years $-85,000 $-2000 $9.500 5 years Cost ntenance cost, per irst vage Value ife The present worth of alternative X is $ ] and that of alternative Y ?s $? Alternative (Click to select) is selected by the company.

Explanation / Answer

X Y Annual cost -10000 -2000 Annuity factor for 10% 3.7908 3.7908 Present value of Cost -37908 -7582 Add: Initial Inv estment -35000 -85000 Total Present value of cost -72908 -92582 Less: Present value of salvage 2173 5899 Net present worth -70735 -86683 Alternative-X shall be selected

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.