Holly Farms is considering two environmental chambers to accomplish detailed laboratory con- firmations of on-line bacteria tests in chicken meat for the presence of E. coli 0157:H7 and Listeria monocytogenes.
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Chamber D103
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Chamber 490G
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Installed cost, $
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-400,000
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-250,000
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Annual operating cost, $ per year
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-4,000
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-3,000
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Salvage value at 10% of P, $
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40,000
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25,000
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Life, years
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3
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2
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a. If this project will last for 6 years and i = 10% per year, perform an AW method evaluation to determine which chamber is more economical.
b. Chamber D103 can be purchased with different options and, therefore, at different installed costs. They range from $300,000 to $500,000. Will the selection change if one of these other models is installed?