The following annual costs are associated with three new extruder machines being considered for use in...
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The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: X-TRUD Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 13 $2,070,000 $119,000 $89,000 $56,000 $13,000 5 $2,930,000 $87,000 $534,000 $80,000 $11,500 SUPR-X 11 $2,790,000 $108,000 $610,000 $50,000 $15,000 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-108,570 higher than X and $284,590 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $418,430 higher than X and $390,590 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: X-TRUD Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 13 $2,070,000 $119,000 $89,000 $56,000 $13,000 5 $2,930,000 $87,000 $534,000 $80,000 $11,500 SUPR-X 11 $2,790,000 $108,000 $610,000 $50,000 $15,000 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-108,570 higher than X and $284,590 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $418,430 higher than X and $390,590 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1
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Answer rating: 100% (QA)
To determine which extruder the Styrofoam company should choose we need to calculate the equivalent uniform annual cost EUAC for each option and compa... View the full answer
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Posted Date:
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