Lecture 9 Engg. Economy Comparing Alternatives
Lecture 9 Engg. Economy Comparing Alternatives
Lecture 9 Engg. Economy Comparing Alternatives
0 1 2 3 9 10
300,000
1 − (1 + 0.15 ) −10
PWCA = P 121 ,000 + P 300 ,000
0.15
= P 907 ,271.00
ENGINEERING ECONOMY
Type B
Annual costs (excluding depreciation) = P30,000 + P40,000 + P16,000 + P12,000 = P98,000
0 1 2 3 9 10
400,000
1 − (1 + 0.15 ) −10
PWCA = P 98 ,000 + P 400 ,000
0.15
= P 891 ,839.32
Since ACB < ACA for the same period of time, Type B should be selected.
ENGINEERING ECONOMY
By the EUAC method:
Type A
Annual costs (excluding depreciation) = P40,000 + P60,000 + P12,000 + P9,000 = P121,000
0 1 2 3 9 10 0 1 2 3 9 10
121,000 121,000 121,000 121,000 121,000 EUAC EUAC EUAC EUAC EUAC
300,000
0.15
EUACA = P 300 ,000 + P 121 ,000
1 − (1 + 0 .15 ) −10
= P 180 ,775.62
ENGINEERING ECONOMY
Type B
Annual costs (excluding depreciation) = P30,000 + P40,000 + P16,000 + P12,000 = P98,000
0 1 2 3 9 10 0 1 2 3 9 10
98,000 98,000 98,000 98,000 98,000 EUAC EUAC EUAC EUAC EUAC
400,000
0.15
EUACA = P 400 ,000 + P 98 ,000
1 − (1 + 0 .15 ) −10
= P 177 ,700.82