A construction company is evaluating two similar pieces of equipment for their gravel pit operation. If the company policy is to use a MARR = 12%, determine which alternative is economically the...


A construction company is evaluating two similar pieces of<br>equipment for their gravel pit operation. If the company policy<br>is to use a MARR = 12%, determine which alternative is<br>economically the better option. Use the EAC method:<br>Option B<br>$75,000<br>Item<br>Option A<br>$40,000<br>Initial Purchase Cost<br>Operating Cost (1st year)<br>$25,000<br>$15,000<br>Annual increase in Operating Cost<br>No increase<br>2%/yr<br>Lifespan<br>Salvage Value @ end-of-life<br>4 years<br>6 years<br>$10,000<br>$7,000<br>Do this question by hand.<br>

Extracted text: A construction company is evaluating two similar pieces of equipment for their gravel pit operation. If the company policy is to use a MARR = 12%, determine which alternative is economically the better option. Use the EAC method: Option B $75,000 Item Option A $40,000 Initial Purchase Cost Operating Cost (1st year) $25,000 $15,000 Annual increase in Operating Cost No increase 2%/yr Lifespan Salvage Value @ end-of-life 4 years 6 years $10,000 $7,000 Do this question by hand.

Jun 08, 2022
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