Question: 2. Mando is considering two different packaging machines for its plant in Opelika. Both machines are expected to have a useful life of 4 years.



2. Mando is considering two different packaging machines for its plant in Opelika. Both machines are expected to have a useful life of 4 years. The relevant information about the two machines are listed below (note that the annual cost and the annual benefit occur identically at the end of each of the 4 years of life). Mando uses a MARR of 13% Machine A Machine B First Cost 11000 8000 Annual Maintenance Cost 3000 2500 Annual Benefit 6000 7000 Salvage Value 1500 0 a. What do you recommend to Mando? (You have to select one - use Present Worth Analysis) (15 points) b. Find the project balance of Machine B for each of the four years of the project life. (15 points) Extra Credit Estimate the IRR of the incremental project (A-B) to between three consecutive integers. (The IRR is less than 9%) (10 points)
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