MKBK Manufacturing Inc. is considering buying a CNC machine from one of the following four reconditioned machines.

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MKBK Manufacturing Inc. is considering buying a CNC machine from one of the following four reconditioned machines. The company will replace the machine at the end of 10 years. All of them are expected to have the same salvage value of 10% of the initial cost at the end of 10 years. MARR is 10%. Which one of the alternative it should buy?
A. Machine C
B. Machine A
C. Machine B
D. Machine D
MKBK Manufacturing Inc. is considering buying a CNC machine from
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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