Transformers for underground works were planned to be provided. Type A has an initial cost of $70,000 and a life of 8 years. Type B has an initial cost of $95,000 and a life expectancy of 12 years. The annual operating cost for type A is expected to be $9000, while the AOC for type B is expected to be $7000. Salvage values are $5000 for type A, and $10,000 for type B. Using the incremental cash flow analysis, choose the better alternative.
Transformers for underground works were planned to be provided. Type A has an initial cost of $70,000 and a life of 8 years. Type B has an initial cost of $95,000 and a life expectancy of 12 years. The annual operating cost for type A is expected to be $9000, while the AOC for type B is expected to be $7000. Salvage values are $5000 for type A, and $10,000 for type B. Using the incremental cash flow analysis, choose the better alternative.
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter6: Linear Systems
Section6.8: Linear Programming
Problem 5SC: If during the following year it is predicted that each comedy skit will generate 30 thousand and...
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