09. Two processes are being considered for the production of a machine part. Process 1 requires an equipment cost of P XXXXXXXXXX, a yearly operating cost of P XXXXXXXXXX, and has zero salvage value...

09. Two processes are being considered for the production of a machine part. Process 1 requires an equipment cost of P180 000.00, a yearly operating cost of P90 000.00, and has zero salvage value at the end of its 6-year life. Process 2 has corresponding figures of P320 000.00, P72 000.00, P45 000.00 and 9-year life. If the applied MARR is 20%, compare the two processes using PW analysis.

(Ans. P_T1= -P693 567.36; P_T2= -P718 084.62)