Question: 3) (25 Total points) For the cash flows shown and by rate of return analysis, determine which of the two machine should the company select?
3) (25 Total points) For the cash flows shown and by rate of return analysis, determine which of the two machine should the company select? The company's MARR is 20% per year. DN is NOT an option. Machine A 15.000 1,600 Machine B 25,000 400 Initial cost, Annual maintenance cost, $ per year Salvage value, $ Life, year 3,000 6,000 4) (20 Total points) For the cash flows below, determine which alternative is best at an interest rate of 1% per month. 400,000 20,000 900.000 13,000 80,000 Initial cost, $ 9,000 Annual maintenance 30,000 cost, S per month Overhaul cost every - 10 years, S Cost in year 2, $ 5,000 Salvage value, $ 7,000 Life, year 3 7,000 6,000 25,000 10 Infinity 5) (25 Total points) An engineer must recommend one of two locations for monitoring high colony counts of E. coli and other bacteria in watershed. Use PW analysis and MARR 10% per year to select the better location. Location B Location A 15,000 3500 18.000 3100 Initial cost, Annual lease cost, S per year Deposit return, S Lease term, years 1,000 2,000 9
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