Hospital is evaluating the purchase of new office equipment from three vendors. Assume MARR=15% and 4 year useful life on all equipment. Select best vendor.
Assume: Analysis period = useful life = 4 yrs
Company A Company B Company C
First Cost $15K $25K $20K
Annual O&M 1600 400 900
Annual Benefit 8K 13K 11K
Salvage Value 3K 6K 4.5K
– Select best vendor.
– What is the NPV of company B?
– If you had $500,000 today in an account earning 10% each year, how much could you withdraw each year for 25 years?