Dave Metal is examining two options - Machine A and Machine B - for a core-cutting...

 

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Dave Metal is examining two options - Machine A and Machine B - for a core-cutting machine. Initial Cost Annual Savings Annual Maintenance Cost Labor Life Salvage Value Machine A $ 250,000 $28,000 $10,000/year +0.05/unit 1.25/widget 15 years $22,500 Machine B $ 180,000 $ 22,000 $20,000+ 0.01/widget 0.50/widget 10 years 17,000 MARR is 12 percent and the company's sale projection is 30,000 widgets/year. Should either, both or neither machine be purchased? Use an annual worth comparison (show the calculations). Dave Metal is examining two options - Machine A and Machine B - for a core-cutting machine. Initial Cost Annual Savings Annual Maintenance Cost Labor Life Salvage Value Machine A $ 250,000 $28,000 $10,000/year +0.05/unit 1.25/widget 15 years $22,500 Machine B $ 180,000 $ 22,000 $20,000+ 0.01/widget 0.50/widget 10 years 17,000 MARR is 12 percent and the company's sale projection is 30,000 widgets/year. Should either, both or neither machine be purchased? Use an annual worth comparison (show the calculations).

Answer rating: 100% (QA)

To determine whether Dave Metal should purchase either both or neither of the machines we will use an annual worth comparison This method calculates t... View the full answer