What is the present worth of option b

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Question - You work for the Baylor Scott & White System EHS Department. You are asked to procure new sharps disposal containers for your clinics.  You have two primary options, Option A and Option B. To implement across all of your clinics, the initial costs are $26,350 for Option A and $31,900 for Option B. Both have estimated useful lives of 12 years with no salvage value. Both options will save you in disposal costs and lost time workday cases. The estimated savings for the options are:


Option A

Option B

Year 1

$3,945

$5,250

Year 2

$4,095

$5,250

Year 3

$4,245

$5,250

Year 4

$4,395

$5,250

Year 5

$4,545

$5,250

Year 6

$4,695

$5,250

Year 7

$4,845

$5,250

Year 8

$4,995

$5,250

Year 9

$5,145

$5,250

Year 10

$5,295

$5,250

Year 11

$5,445

$5,250

Year 12

$5,595

$5,250

Required - Assume 6% interest. What is the present worth of Option B?

Reference no: EM133147212

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