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4. An electric switch manufacturing company must choose one of three different assembly methods. Method A...

4. An electric switch manufacturing company must choose one of three different assembly methods. Method A will have a first cost of $20,000, an annual operating cost of $5000, and a service life of 2 years. Method B will cost $50,000 to buy and will have an annual operating cost of $7000 over its 4-year service life. Method C will cost $100,000 initially with an annual operating cost of $5000 over its 8-year life. Methods A and B will have no salvage value, but method C will have some equipment worth an estimated $13,000. Which method should be selected? Use present worth analysis at an interest rate of 12% per year.

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jeff jeffy answered 2 years ago
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