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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
4.22 The manager of engineering at the 900- megawatt Hamilton Nuclear Power Plant has three options to supply personal safety equip- ment to employees. Two are vendors who sell the items, and a third will rent the equipment for $50,000 per year, but for no more than 3 years per contract. These items have relatively short lives due to constant use. The MARR is 10% per year.
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Initial cost, $ -75,000 -125,000 0
Annual upkeep
cost, $/year -27,000 -12,000 0
Annual rental
cost, $ per year 0 0 -50,000
Salvage value, $ 0 30,000 0
Estimated life, 2 3 Maximum
years of 3
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a. Select from the two sales vendors using the LCM and PW analysis.
b. Determine which of the three options is cheaper over a study period of 3 years.
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