Use present worth analysis

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Given the data below, use PRESENT WORTH ANALYSIS at a 15% interest rate to decide if method A or method B should be used.

Method A: Initial capital cost of $100,000. Operating cost of $20,000 per year. Salvage value after 3 years is $20,000.

Method B: First cost of $150,000. Operating cost of $10,000 per year. Salvage value after 3 years is $50,000.

Reference no: EM13735703

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