A
B
C
Acquisition Cost
P700 000.00
P850 000.00
P1 000 000.00
Shipping Cost
5%
8%
Net Annual Benefit
P155 000.00
P145 000.00
P170 000.00
Useful Life
8 years
16 years
Salvage Value
P35 000.00
P70 000.00
P80 000.00
If at the end of eight years alternative A could be replaced with an identical machine having the same cost and benefits, determine the alternative to be selected using present worth analysis and a 14% MARR.
(Ans. PTA= -P5005.80; PTB= P24 536.06; PTC= -5108.53; select alternative B)
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