Katherine, a biology major at the University of Texas, wants to run for office one day and pretends that she cares about the elderly. She wants to provide meals to elderly care centers, and in order to do so, she needs refrigerators to keep the food in a cold and dry environment. She has two option for mobile refrigerators. Applying annual cash flow techniques (EAUW), and considering a MARR of 8%, which option should she pick? Option 1 Option 2 Initial cost P, $ 18,000 19,000 Annual O&M, $/year 5,000 8,000 Refurbishment cost, $ 0 2000 (every 4 years) Salvage value 2,000 4,000 Life, years 4 12

Katherine, a biology major at the University of Texas, wants to run for office one day and pretends that she cares about the elderly. She wants to provide meals to elderly care centers, and in order to do so, she needs refrigerators to keep the food in a cold and dry environment. She has two option for mobile refrigerators. Applying annual cash flow techniques (EAUW), and considering a MARR of 8%, which option should she pick? Option 1 Option 2 Initial cost P, $ 18,000 19,000 Annual O&M, $/year 5,000 8,000 Refurbishment cost, $ 0 2000 (every 4 years) Salvage value 2,000 4,000 Life, years 4 12

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter5: Managing Checking And Savings Accounts

Section: Chapter Questions

Problem 2FPC

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	Option 1	Option 2
Initial cost P, $	18,000	19,000
Annual O&M, $/year	5,000	8,000
Refurbishment cost, $	0	2000 (every 4 years)
Salvage value	2,000	4,000
Life, years	4	12