Two injection molding systems are being considered for a production line. Use of an injection molding system
Question:
Two injection molding systems are being considered for a production line. Use of an injection molding system will reduce the manual time spent on the production line which increases annual profits. System A has an initial cost of $30,000 with annual operating costs of $10,000 and a life of 8 years. The salvage value of System A is $10,000. An alternative system, System B, has an initial cost of $21,000 with annual operating costs of $10,000 and a salvage value of $7,000 at the end of its 4-year life. In both cases, the annual increase in revenue due to the addition of the heat treatment process is expected to be $20,000. The MARR for this project is 10%. Determine which system should be installed.
Step by Step Answer:
Thermal Energy Systems Design And Analysis
ISBN: 9781138735897
2nd Edition
Authors: Steven G. Penoncello