Problem 5.73
Given the following data, use present worth analysis to find the
best alternative, A, B, or C.
Use an analysis period of 12 years and 15% interest.
Please show complete solution procedure, and include
cash flow diagram(s) for each machine.
Machine
A
B
C
Initial
cost
$10,000
$15,000
$12,000
Annual
benefit
$6,000
$10,000
$5,000
Salvage
value
$1,000
$-2,000
$3,000
Useful life
(yrs)
2
years 3
years
4 years