One of two new techniques, or the current method, can be used to control a syste

Question

One of two new techniques, or the current method, can be used to control a system. The estimated costs and benefits are given below for each method. Assuming all methods have a 10-year life with zero salvage value, determine which one should be selected, using a MARR of 15% per year and the B/C method.

Technique 1 Technique 2
Installed cost,$ 130,000 160,000
AOC, $/year 10,000 30,000
Benefits, $/year 50,000 60,000

Select one:

a. Select technique 1

b. Select technique 2

c. Select both techniques 1 and 2

d. Select DN technique

Explanation / Answer

a. Select technique 1

in technique first we get more benefits as compare to technique 2 as per using a MARR of 15% per year and the B/C method.

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