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What is Technology Selection Using Present Worth Method about?

Based on the present worth method and 15% interest rate, Technology A should be selected. While Technology B has a lower initial cost of Rs. 5,00,000 compared to Rs. 4,00,000 for Technology A, Technology A has lower annual operation and maintenance costs of Rs. 25,000 versus Rs. 29,000 for Technology B. When calculated using the present worth method, Technology A would have a lower total cost over the 15 year service life. For the annual equivalent worth method and machines, Machine A should be selected. A

Author

Sachin Sahoo

Language

EN