Q5: A construction company is considering purchasing a machine for one of their construction sites. There are two options shown in below table: Initial Cost (S) Annual Maintenance and Operation Cost ($) Salvage Value ($) Life time (years) Machine 1 Machine 2 -100,000 -5000 50,000 5 -150,000 -3500 80,000 10 Considering that required service life is 10 years and purchases are repetable, which machine should be chosen based on a Present Worth comparison analysis, at MARR=10%?

Q5: A construction company is considering purchasing a machine for one of their construction sites. There are two options shown in below table: Initial Cost (S) Annual Maintenance and Operation Cost ($) Salvage Value ($) Life time (years) Machine 1 Machine 2 -100,000 -5000 50,000 5 -150,000 -3500 80,000 10 Considering that required service life is 10 years and purchases are repetable, which machine should be chosen based on a Present Worth comparison analysis, at MARR=10%?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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