a. Compare the probable part cost from Machine A and Machine B, assuming that each will make the part to the same specification. Which machine yields the lowest part cost? Assume that the MARR = 10% per year.
b. If the cost of labor can be cut in half by using part-time employees, which machine should be recommended?

Transcribed Image Text:

Machine A Machine B Initial capital investment $35,000 $150,000 Life Market value Parts required per year10,00010,000 Labor cost per hour Time to make one part 20 minutes 10 minutes Maintenance cost per year $1,000 3,000 10 years 8 years 3,500 $15,000 $16 $20