A company is considering two alternatives for manufacturing


A company is considering two alternatives for manufacturing a certain part. method R will have a first cost of 40,000, an annual operating costs of 25,000 $, and a 10,000 $ salvage value after its f8ve year life. Method S will have an initial cost of 100,000 ,an annual operating cost of 15,000 $, and a 12,000 salvage value after its 10 year life. at an interest rate of 12% per year,

1) the present worth values of the two alternatives are closest to:

a) PWR= $124,446, PWS= $180,889

b)PWR, $195,057, PWS= $180,889

C)PWR= $124,446, PWS= $147,263

D) PWR= $195,057 PWS=$1802447,263

2) for the alternatives, their annual worth values are closest to:

a)AWR=$31,510, AWS= $32,016

B) AWR= $31,510, AWS= $50,851

C) AWR= $34,522, AWS= $32,016

D) AWR= 34,522, AWS= $50,51

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Business Economics: A company is considering two alternatives for manufacturing
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