You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 15% per year? Why is yours the correct choice?

Alternative X Y
First Cost $-45,000 $-58,000
Maintenance cost, per Year $-8000 $-4000
Salvage Value $2,000 $12,000
Life 5 years 5 years

The present worth of alternative X is( $ )and that of alternative Y is( $ ).

Present value of Project X is $41990.6

Present value of Project Y is $34605.2

Explanation:

                           PROJECT X                                    

PARTICULARS    YEAR      Cost/Value   Present Value factor 15% Present Value

Initial Cost                0              45000         1                  45000

Maintenance           1- 5             8000         3.352           26816

cost

Annual Depreciation 1-5           (8600)       3.352           (28827.2)

Salvage Value              5           (2000)       0.4971         (994.2)    

                      Present value of cash outflows             41,990.6

                             PROJECT Y

PARTICULARS   YEAR   COST/VALUE Present value factor 15% PRESENT VALUE

Initial Cost                 0           58000             1                    58000

Maintenance           1- 5           4000            3.352               13409  

cost

Annual Depreciation  1-5        (9200)           3.352             (30838.4)  

Salvage Value              5         12000            0.4971            (5965.2)    

Present Value of cash outflow                                          34605.2  

Note: Figures in parenthesis denote cash inflow

Working Notes

Depreciation for project X  =  = $8600 p.a

Depreciation for project Y =  = $9200 p.a

Decision: Since present value of cash outflows is lesser for Project Y, it should be taken up.

the most important factor in the

work process or industry is to retain the interest of the employee. and to

retain them, their salary or profit must be adjusted to the best value. unless

the employee does not do his job properly, employees must receive bonuses or

benefits to ensure them to stay in the company. it will actually make them stay

longer, make them feel important and reduce costs for hiring new employees.

explanation:

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explanation: i am going to tell you a lie dont know i just wanted to answer lol