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You are considering the purchase of an air-conditioning unit for your company. Two are available. Unit A costs $150,000 and has an expected life of 20 years with a MTBF of 5 years. Unit B costs $141,000 and has an expected life of 15 years and a MTBF of 3 years. The expected cost of a repair for each unit is $1000. Assuming there is no value at the end of the life and interest rate is 12% per annum. which unit has the lowest life-cycle cost?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92180338

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