Corporation requires chemical finishing process for a product isunder contract f

Question

Corporation requires chemical finishing process for a product isunder contract for a period of 6 years. There are 3 options.Neither option 1 or 2 can be repeated after its process life.Option 3, will always be available from Corporation at same costduring the contract period.
-Option 1: Process device A, which costs $100,000, has annualoperating and labor costs of $60,000, and has useful service lifeof 4 years, with estimated salvage of $10,000
-Option 2, Process device B, costs $150,000, has annual operatingand labor costs of $50,000, and has a useful service life of sixyears, with an estimated salvage value of $30,000.
-Option 3, Subcontract the process out at cost of $100,000 ayear.

So I have an excel and have done Option 1 and 2. I know Option 1 iscorrect, but I need a little help on Option 2 and 3 if you couldcorrect or help me out on what to put, needing to show cashflow for each option for each period ranging from year 0 to 6.

http://i812.photobucket.com/albums/zz41/uofmx12/excel1.jpg

Then create a table that shows present worth of each alternative atvalues of i ranging from 5% to 25%. and making graphic depictingthe present worth of each alternative versus the value of i.

Seems like a lot but don't think it is very difficult. If you couldjust explain how to do it I can. Thanks

Explanation / Answer

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