Acme Plastics Company must choose between two types of injection molding machines. Machine A costs $600,000,...

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Acme Plastics Company must choose between two types of injection molding machines. Machine A costs $600,000, will last for five years, and will require $60,000 in maintenance each year. Machine B costs $750,000, will last for seven years, and will require $30,000 in maintenance each year. Maintenance costs for cranes A and B occur at the end of each year. The appropriate discount rate is 12 percent per year. Which machine should Acme purchase? Acme Plastics Company must choose between two types of injection molding machines. Machine A costs $600,000, will last for five years, and will require $60,000 in maintenance each year. Machine B costs $750,000, will last for seven years, and will require $30,000 in maintenance each year. Maintenance costs for cranes A and B occur at the end of each year. The appropriate discount rate is 12 percent per year. Which machine should Acme purchase?

Answer rating: 100% (QA)

A 1 YEAR A 2 3 0 4 1 5 2 6 3 7 4 8 5 9 6 10 7 11 12 13 14 15 16 456 A B B 0 0 C 60000 30000 3... View the full answer