SOLVE STEP BY STEP Austin General Hospital is evaluating new lab equipment offered by three companies. == In each case the interest rate is 15% == each company has submitted information, and the hospital has estimated the benefits of each (see table) Build model - Excel must display de decision a) Use NPW analysis to determine the company from which the hospital should purchase the equipment. b) Use incremental Rate of Return Analysis to determine the company from which the hospital should purchase the equipment. Company Name --> Purchase Cost O&M Costs Annual benefit Salvage value Useful life, in years Aggies, Inc. $52,000.00 $15,000.00 $38,500.00 $12,500.00 4 Wolfe's, Inc. $67,500.00 $1,200.00 $38,000.00 $21,000.00 12 Golden Panther $62,000.00 $9,000.00 $31,000.00 $19,000.00 6

SOLVE STEP BY STEP Austin General Hospital is evaluating new lab equipment offered by three companies. == In each case the interest rate is 15% == each company has submitted information, and the hospital has estimated the benefits of each (see table) Build model - Excel must display de decision a) Use NPW analysis to determine the company from which the hospital should purchase the equipment. b) Use incremental Rate of Return Analysis to determine the company from which the hospital should purchase the equipment. Company Name --> Purchase Cost O&M Costs Annual benefit Salvage value Useful life, in years Aggies, Inc. $52,000.00 $15,000.00 $38,500.00 $12,500.00 4 Wolfe's, Inc. $67,500.00 $1,200.00 $38,000.00 $21,000.00 12 Golden Panther $62,000.00 $9,000.00 $31,000.00 $19,000.00 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer questiion 2
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