Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 17% per year, which alternative has the lower present worth? Method DDM LS First Cost M&O Cost, per Year Salvage Value Life $-100,000 $-500,000 $-25,000 $27,000 $-40,000 $6,000 2 years 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The DDM v method is selected.
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 17% per year, which alternative has the lower present worth? Method DDM LS First Cost M&O Cost, per Year Salvage Value Life $-100,000 $-500,000 $-25,000 $27,000 $-40,000 $6,000 2 years 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The DDM v method is selected.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...
Related questions
Question
3
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College