ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below.
End of Year |
Gate 1 |
Gate 2 |
Gate 3 |
---|---|---|---|
0
|
-$15,000 | -$19,000 | -$24,000 |
1
|
-$6,500 | -$5,600 | -$4,000 |
2
|
-$6,500 | -$5,600 | -$4,000 |
3
|
-$6,500 | -$5,600 | -$4,000 |
4
|
-$6,500 | -$5,600 | -$4,000 |
5
|
-$6,500 + $0 | -$5,600 + $2,000 | -$4,000 + $5,000 |
What is the future worth of each alternative?
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