7. A company is evaluating three options to buy a new equipment to upgrade its manufacturing process. The equipment's useful life is 5 years and the annual interest rate is 12%. Use present worth analysis to select the best alternative among the three options. Option A Option B Option C $ 15,500 $ 1,500 $ 9,500 $ 3,500 $ 19,000 $ 1,800 $ 11,000 $ 6,000 $ 15,000 $ 1,100 $ 9,000 Initial cost Operation and Maintenance costs Annual benefit Salvage value $ 4,000

7. A company is evaluating three options to buy a new equipment to upgrade its manufacturing process. The equipment's useful life is 5 years and the annual interest rate is 12%. Use present worth analysis to select the best alternative among the three options. Option A Option B Option C $ 15,500 $ 1,500 $ 9,500 $ 3,500 $ 19,000 $ 1,800 $ 11,000 $ 6,000 $ 15,000 $ 1,100 $ 9,000 Initial cost Operation and Maintenance costs Annual benefit Salvage value $ 4,000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 11PROB

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