Options are under consideration to meet a 12 period need are shown below. Options have different...
Options are under consideration to meet a 12 period need are shown below. Options have different lives so an adjustment for equivalence is required to perform a valid analysis using engineering economic methods. The interest rate for use is 8.0%.
| Option | A | B | C | D |
| Purchase Cost | 65,000 | 41,000 | 29,000 | 19,000 |
| First Year Operating Cost | 4,500 | 6,400 | 7,500 | 8,100 |
| Operating Cost Increase per Period | 500 | 700 | 900 | 1400 |
| Life/Salvage | 6/4,000 | 4/2,000 | 3/1,500 | 2/800 |
a. What is the PW of Option A?
b. What is the PW of Option B?
c. What is the PW of Option C?
d. What is the PW of Option D?
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