End of Year Gate 1 Gate 2 Gate 3 -$15,000 -$19,000 -$24,000 1 -$6,500 -S5,600 -$4,000 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 -$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter1: Accounting And The Financial Statements
Section: Chapter Questions
Problem 46E: OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had...
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The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. Using a future worth analysis with a MARR of 20%/year, determine the preferred gate.

End of Year
Gate 1
Gate 2
Gate 3
-$15,000
-$19,000
-$24,000
1
-$6,500
-S5,600
-$4,000
-$6,500
-$5,600
-$4,000
3
-$6,500
-$5,600
-$4,000
4
-$6,500
-$5,600
-$4,000
-$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000
Transcribed Image Text:End of Year Gate 1 Gate 2 Gate 3 -$15,000 -$19,000 -$24,000 1 -$6,500 -S5,600 -$4,000 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 -$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000
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