A Manufacturing Company Is Deciding Between Three Maintenance Plans for a New

Essay

A manufacturing company is deciding between three maintenance plans for a new waste management system. Plan A needs a single prepayment of $59,000 at the beginning of the year and the contract needs to be renewed every 3 years. Plan B is a two- year contract and requires a payment of $19,470 at the end of year 1 and another payment of $20,060 at the end of year 2. Plan C provides a three- year services with two payments of $29,500 made at the end of years 1 and 3. Which maintenance plan should be selected based on the present worth method? Assume the company uses a MARR of 11% and a study period of 6 years.