Manufacture Hawk has two options for installing legally required safety equipment.Option Ex has an initial cost of $25,000 and annual operating costs over three years of $5000, $5250, $5600.Option WYE has an initial cost of $40,000 and annual operating costs of $4000, $4200, $4450, $4750 and $5100.Whether Manufacture Hawk chooses Ex or Wye, the equipment is always needed and must be replaced at the end of its useful life.Which choice is least expensive over the long run? Use a discount rate of 9%.

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The Answer of Manufacture Hawk has two options for installing legally required safety equipment.Option Ex has an initial cost of $25,000 and annual operating costs over three years of $5000, $5250, $5600.Option WYE has an initial cost of $40,000 and annual operating costs of $4000, $4200, $4450, $4750 and $5100.Whether Manufacture Hawk chooses Ex or Wye, the equipment is always needed and must be replaced at the end of its useful life.Which choice is least expensive over the long run? Use a discount rate of 9%.

Manufacture Hawk Has Two Options for Installing Legally Required Safety