ibological 0.e, low friction) Dexcon Technologies, Inc., is evaluating two alter

Question

ibological 0.e, low friction) Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament withtr properties f MARR of 10% per year, which alternative has the lower present worth? or creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a Method DDM $-230,000 $-45,000 $4,000 LS First Cost M&O Cost, per Year Salvage Value Life $15,000 2 years 4 years The present worth for the DDM method is S The present worth for the LS method is S The Cick to select) method is selected

Explanation / Answer

Ddm

Depreciation = 230000- 4000 / 2

= 113000

Annual cost = 78100

First cost = 230000

Present worth = 230000 - 3306 + 78100

= 304794

LS

First cost = 410000

Annual cost = 110945

Present value of salvage = 10245

Worth of LS = 510700

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