Which method should be used

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Reference no: EM131807266

If produced by Method A, a product's initial capital cost will be $100,000, its operating cost will be $20,000 per year, and its salvage value after 3 years will be $20,000. With Method B there is a first cost of $150,000, an operating cost of $10,000 per year, and a $50,000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used? Contributed by Hamed Kashani, Saeid Sadri, and Baabak Ashuri, Georgia Institute of Technology

Reference no: EM131807266

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