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QUESTION 2 Answer questions 2 to 4 with the following information: A bi-level mall is under construction. Installation of only 10 escalators is planned at the start although the ultimate design calls for 16. The question arises whether to provide necessary facilities that would permit the installation of the additional escalators (e.g., stair supports, wiring conduits, and motor foundations) at the mere cost of their purchase and installation now or to defer investment in these facilities until the escalators need to be installed. The two options are detailed as follows: Option 1: Provide these facilities now for all six future escalators at $250,000. Option 2: Defer the investment as needed. Installation of two more escalators is planned in three years, two more in seven years, and the last two in ten years. The installation of these facilities at the time they are required is estimated to cost $220,000 in year 3, $240,000 in year 7, and $260,000 in year 10. For both options, additional annual expenses are estimated at $500 for each escalator facility installed. Assume the company's MARR is 15%. 2. PW of Option 1 is approximately equal to: OA $144,654 B $310,226 OC $265,056 OD None of the above

QUESTION 2 Answer questions 2 to 4 with the following information: A bi-level mall is under construction. Installation of only 10 escalators is planned at the start although the ultimate design calls for 16. The question arises whether to provide necessary facilities that would permit the installation of the additional escalators (e.g., stair supports, wiring conduits, and motor foundations) at the mere cost of their purchase and installation now or to defer investment in these facilities until the escalators need to be installed. The two options are detailed as follows: Option 1: Provide these facilities now for all six future escalators at $250,000. Option 2: Defer the investment as needed. Installation of two more escalators is planned in three years, two more in seven years, and the last two in ten years. The installation of these facilities at the time they are required is estimated to cost $220,000 in year 3, $240,000 in year 7, and $260,000 in year 10. For both options, additional annual expenses are estimated at $500 for each escalator facility installed. Assume the company's MARR is 15%. 2. PW of Option 1 is approximately equal to: OA $144,654 B $310,226 OC $265,056 OD None of the above

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter1: Fundamental Concepts Of Algebra
Section1.2: Exponents And Radicals
Problem 90E
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QUESTION 2 Answer questions 2 to 4 with the following information: A bi-level mall is under construction. Installation of only 10 escalators is planned at the start although the ultimate design calls for 16. The question arises whether to provide necessary facilities that would permit the installation of the additional escalators (e.g., stair supports, wiring conduits, and motor foundations) at the mere cost of their purchase and installation now or to defer investment in these facilities until the escalators need to be installed. The two options are detailed as follows: Option 1: Provide these facilities now for all six future escalators at $250,000. Option 2: Defer the investment as needed. Installation of two more escalators is planned in three years, two more in seven years, and the last two in ten years. The installation of these facilities at the time they are required is estimated to cost $220,000 in year 3, $240,000 in year 7, and $260,000 in year 10. For both options, additional annual expenses are estimated at $500 for each escalator facility installed. Assume the company's MARR is 15%. 2. PW of Option 1 is approximately equal to: OA $144,654 B $310,226 OC $265,056 OD None of the above
Transcribed Image Text:QUESTION 2 Answer questions 2 to 4 with the following information: A bi-level mall is under construction. Installation of only 10 escalators is planned at the start although the ultimate design calls for 16. The question arises whether to provide necessary facilities that would permit the installation of the additional escalators (e.g., stair supports, wiring conduits, and motor foundations) at the mere cost of their purchase and installation now or to defer investment in these facilities until the escalators need to be installed. The two options are detailed as follows: Option 1: Provide these facilities now for all six future escalators at $250,000. Option 2: Defer the investment as needed. Installation of two more escalators is planned in three years, two more in seven years, and the last two in ten years. The installation of these facilities at the time they are required is estimated to cost $220,000 in year 3, $240,000 in year 7, and $260,000 in year 10. For both options, additional annual expenses are estimated at $500 for each escalator facility installed. Assume the company's MARR is 15%. 2. PW of Option 1 is approximately equal to: OA $144,654 B $310,226 OC $265,056 OD None of the above
QUESTION 3 PW of Option 2 is approximately equal to: OA $302,740 O B. $64,268 OC $159,840 D. None of the above QUESTION 4 Which option is better? OA Option 1 is better B. Option 2 is better OC Both options are equal OD None of the above
Transcribed Image Text:QUESTION 3 PW of Option 2 is approximately equal to: OA $302,740 O B. $64,268 OC $159,840 D. None of the above QUESTION 4 Which option is better? OA Option 1 is better B. Option 2 is better OC Both options are equal OD None of the above
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