You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 12% per year? Why is yours the correct choice? Alternative X Y First cost, $ −45,000 −58,000 Maintenance cost, $/year −8,000 −4,000 Salvage value, $ 2,000 12,000 Life, years 5 5

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