Calculate each projects equivalent annual cost given

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Metal works, Inc is analyzing two alternative configurations for the firm' new plasma cutter shop. The two alternatives donated A and B below perform the same task but require very different payments.

Year           Alternative A          Alternative B

0              $(80,000)                    $(80,000)

1                (20,000)                    (6,000)

2           (20,000)                      (6,000)

3            (20,000)                        (6,000)

4              (20,000)

5                 (20,000)

6                 (20,000)

7              (20,000)

Problem a. Calculate each projects equivalent annual cost given a 10% discount rate.

Problem b. Which of the alternatives do you think the company should select?

Reference no: EM132935570

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