You have been asked to evaluate two alternatives,X and Y,
Chapter 5, Problem 5.7(choose chapter or problem)
You have been asked to evaluate two alternatives,X and Y, that may increase plant capacity for manufacturinghigh-pressure hydraulic hoses. The parametersassociated with each alternative havebeen estimated. Which one should be selected onthe basis of a present worth comparison at an interestrate of 12% per year? Why is yours the correctchoice? Alternative X YFirst cost, $ 45,000 58,000Maintenance cost, $/year 8,000 4,000Salvage value, $ 2,000 12,000Life, years 5 5
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