A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the market, there are four available cranes offered by different well-known companies. The first equipment is a portable/mobile gantry crane with a cost of P2,400,000 and an installation cost of P50,000. During its life of 5 years, the cost of power and labor is P130,000 and P280,000 respectively. Maintenance should be followed as well and must be done on its scheduled program. The cost of maintenance per year is P116,000. The second equipment is a double girder gantry crane with a cost of P3,000,000 and an installation cost of P40,000. During its life of 5 years. the cost of power and labor is P136,000 and P190,000 respectively. The cost of maintenance per year is P93.000. The third equipment is an electric trolley gantry crane with a cost of P4.960,000 and an installation cost of P55,000. During its life of 5 years, the cost of power and labor is P240,000 and P130,000 respectively. The cost of maintenance per year is P420,000. The fourth equipment is a single girder gantry crane with a cost of P5.200.000 and an installation cost of P45,000. During its life of 5 years, the cost of power and labor is P2.020.000 and P70.000 respectively. The cost of maintenance per year is P200,000. The tax and insurance is 3%. If the money is worth 17%, which machine should be chosen?
A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the market, there are four available cranes offered by different well-known companies. The first equipment is a portable/mobile gantry crane with a cost of P2,400,000 and an installation cost of P50,000. During its life of 5 years, the cost of power and labor is P130,000 and P280,000 respectively. Maintenance should be followed as well and must be done on its scheduled program. The cost of maintenance per year is P116,000. The second equipment is a double girder gantry crane with a cost of P3,000,000 and an installation cost of P40,000. During its life of 5 years. the cost of power and labor is P136,000 and P190,000 respectively. The cost of maintenance per year is P93.000. The third equipment is an electric trolley gantry crane with a cost of P4.960,000 and an installation cost of P55,000. During its life of 5 years, the cost of power and labor is P240,000 and P130,000 respectively. The cost of maintenance per year is P420,000. The fourth equipment is a single girder gantry crane with a cost of P5.200.000 and an installation cost of P45,000. During its life of 5 years, the cost of power and labor is P2.020.000 and P70.000 respectively. The cost of maintenance per year is P200,000. The tax and insurance is 3%. If the money is worth 17%, which machine should be chosen?
a.) Use Annual Cost Method
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