2. A construction firm plans to purchase new excavator. Two manufacturers offered to company with the respective estimates below. Seller A Seller B Descriptions First cost, PhP (in 1000 PhP) Annual M&O cost, PhP/ Year (in 1000 Php) Salvage value, PhP Economic life, Years 15,000 3,500 1,000 18,000 3,100 2,000 6

M2

Q1).Using AW method compare between the following alternatives: Operating and maintenance Alt. F.C. Income at the Annual nd S.V. Useful life i. end of 2 yearIncome A 35000 3500 2800 7000 8 8% B. 32000 1500 4700 2500 8%

which process line should be built for a new chemical? the expected market for the chemical is 16 years. an 18% rate is used to evaluate new process facilities, which are compared with present worth. how much does the better choice save?   First cost O &M cost/year salvage life A $14 M $2.5 M $2 M 8 years B 22 M 3 M 7.5 M 16 years