Use present value analysis to decide which process

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A new alloy can be produced by process A. which costs $200,000. The operating cost will be $10,000 per quarter with a salvage value of $25,000 after its two-year life. Process B will have a first cost of $250,000, an operating cost of $15,000 per quarter, and a $40,000 salvage value after its four-year life. The interest rate is 8% a year compounded quarterly. Use present value analysis to decide which process should be selected.

Reference no: EM131053028

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