Business, 01.03.2021 22:20 madiballet125

Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,950,000, has annual operating and maintenance costs of $650,000, and requires overhauls every 5 years at a cost of $950,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,950,000, has annual operating and maintenance costs of $700,000, and requires overhauls every 10 years at a cost of $3,400,000. Using a 9.5 %/year interest rate, determine the capitalized cost for each design and recommend which design should be chosen

a.
Design A= $13,605,253
Design B= $14,786,379
Design A is preferred over B

b.
Design A= $14,605,253
Design B= $15,786,379
Design A is preferred over B

c.
Design A= $14,605,253
Design B= $13,786,379
Design B is preferred over A

d.
Design A= $16,305,253
Design B=$17,486,379
Design A is preferred over B .

Answers: 3

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Two incinerators are being considered by a waste management company. Design A has an initial cost of...

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