Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 40

Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, bathroom fans, dryers, and other building air exhausts, can be made by two different methods. Method X will have a first cost of $75,000, an operating cost of $32,000 per year, and a $9000 salvage value after 4 years. Method Y will have a first cost of $140,000, an operating cost of $24,000 per year, and a $19,000 salvage value after its 4-year life. At an interest rate of 10% per year, which method should be used on the basis of an annual worth analysis