Analysis of future value-types of boreholes for drilling

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Reference no: EM13847469

In some manufacturing operation three types of boreholes for drilling may be used. The cheapest is a stainless high speed steel (HSS), but has a shorter one of gold or another oxide of titanium nitride life. The purchase of HSS drills cost $ 3,500 under the conditions that would be used would last three months. The operating cost of these additions would be $ 2,000 per month. Holes gold oxide would cost $ 6,500 to would last six months, with an operating cost of $ 1,500 per month. The titanium nitride would cost $ 7000 and would last six months, costing $ 1,200 to operate. With an interest rate of 12% per annum, compounded monthly, what kind of hole should be used, according to the analysis of future value?

Reference no: EM13847469

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