An electric switch manufacturing company is try- ing to decide between three different assembly methods. Method...

An electric switch manufacturing company is try-
ing to decide between three different assembly
methods. Method A has an estimated first cost of
$40,000, an annual operating cost (AOC) of $9000,
and a service life of 2 years. Method B will cost
$80,000 to buy and will have an AOC of $6000
over its 4-year service life. Method C costs
$130,000 initially with an AOC of $4000 over its
8-year life. Methods A and B will have no salvage
value, but Method C will have equipment worth
10% of its first cost. Perform both (a) future worth,
and (b) present worth analyses to select the method
at i = 10% per year.

I got for Method C 311K

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Expert Solution

Rahul Sunny answered 1 year ago

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