Re-evaluating the electrical-generator choice

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Reference no: EM131806562

Question: You are reevaluating the electrical-generator choice that was made last year-when your boss had your job. The promised cost savings have not materialized, because the generator is too small. You have identified two alternatives. Alternative A is replacing the generator with one that is the right size and selling the old one. That will cost $50K. Alternative B is buying a small generator to use in addition to the one purchased last year. This will cost $60K. The two generator solution has slightly higher maintenance costs, but it is more flexible and reliable. What criteria (including irreducible) should you use? Which alternative would you recommend and why?

Reference no: EM131806562

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