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?
 FIGURE 1.png)
PWX = -45,000 – 8000(P/A,12%,5) + 2000(P/F,12%,5)
= -45,000 – 8000(3.6048) + 2000(0.5674)
= $-72,704
PWY = -58,000 – 4000(P/A,12%,5) + 12,000(P/F,12%,5)
= -58,000 – 4000(3.6048) + 12,000(0.5674)
= $-65,615
Select Alternative Y, because it has the larger PW value, that is, the lower PW of costs.
You might also like to view...
What type of compressor would you use in an instrument air system?
A. Axial compressor B. Centrifugal compressor C. Rotary compressor D. Reciprocating compressor
The energy absorbed by one reactive element is _________ to the energy released by the other
A. increased B. equal C. decreased D. opposite
Find the power delivered to the load resistor R0 for the circuit of Figure P3.12, using node voltage analysis, given that R1 = 2?, RV = R2 = R0 = 4?, VS = 4 V , and IS = 0.5A.
The output of an AND gate is HIGH when ________
A) one input is HIGH and the remaining inputs are LOW B) all inputs are LOW C) all inputs are HIGH D) one input is LOW and the remaining inputs are HIGH