A manufacturing company is planning to replace two old machines in a production line with either two
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Question:
A manufacturing company is planning to replace two old machines in a production line with either two new ones or a single automatic machines which integrates their functions. Relevant cost data are given:
The existing machine have no resale value and the economic life of all new machines is 8 years. Dsicount rate is taken to be 14% by the company.
i) Find NPV of savings obtainable by replacing the existing machines with:
A) Two new machines
B) A single automatic machine
ii) Which options that you choose, why?
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
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