Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, can be made bytwo different methods X and Y. The estimated cash flows are shown in Table below. Whichone should be selected on the basis of Annual Worth (AW) analysis at 10% per year?Method XMethod YFirst cost, $- 75,000- 140,000Annual operating- 32,000- 24,000cost, $Salvage value, $9,0009,000Life, years410%TABLE 15Discrete Cash Flow: Compound Interest Factors10%Single PaymentsUniform Series PaymentsArithmetic GradientsCompoundSinkingCompoundCapitalRecoveryA/PPresentGradientGradientPresentWorthAmountWorthFundAmountPresent WorthUniform SeriesF/PP/FA/FF/AP/AP/GA/Gn11.10000.90911.000001.00001.100000.909121.21000.82640.476192.10000.576191.73550.82640.476231.33100.75130.302113.31000.402112.48692.32910.936641.46410.68300.215474.64100.315473.16994.37811.38121.61050.62090.163806.10510.263803.79086.86181.81011.77160.56450.129617.71560.229614.35539.68422.223671.94870.51320.105419.48720.205414.868412.76312.621682.14360.46650.0874411.43590.187445.334916.02873.00455.75906.144692.35790.42410.0736413.57950.1736419.42153.3724102.59370.38550.0627515.93740.1627522.89133.7255

Annual worth(AW) can be calculated by using this equation AW =-Frist cost*Capital recovery(A/P) +…

Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, can be made by two different methods X and Y. The estimated cash flows are shown in Table below. Which one should be selected on the basis of Annual Worth (AW) analysis at 10% per year? Method X Method Y First cost, $ - 75,000 - 140,000 Annual operating - 32,000 - 24,000 cost, $ Salvage value, $ 9,000 9,000 Life, years 4 6

Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, can be made by two different methods X and Y. The estimated cash flows are shown in Table below. Which one should be selected on the basis of Annual Worth (AW) analysis at 10% per year? Method X Method Y First cost, $ - 75,000 - 140,000 Annual operating - 32,000 - 24,000 cost, $ Salvage value, $ 9,000 9,000 Life, years 4 6

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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