Let X be the least five significant digits in your student ID. For example, if your...

 

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Let X be the least five significant digits in your student ID. For example, if your student ID is S00012345, then X = 12345. Use the value of X obtained based on your student ID in the problem below. A large company needs to acquire 7 machines. More machines may be needed in the future. The lead engineer has outlined below two alternatives. The company's MARR is 14% per year. Alternative A: For $9 million now, a contractor will provide the necessary number of machines now and in the future, for as long as the company needs them. The annual contract fee is a total of $1.35X with no additional per-machine annual cost. There is no time limit placed on the contract, and the costs do not escalate. Alternative B: The company buys its own machines for $280,000 each and expends an estimated SX per machine in annual operating cost. The machines in this alternative need to be replaced every five years. Perform a capitalized cost evaluation and state which alternative is recommended and why? Let X be the least five significant digits in your student ID. For example, if your student ID is S00012345, then X = 12345. Use the value of X obtained based on your student ID in the problem below. A large company needs to acquire 7 machines. More machines may be needed in the future. The lead engineer has outlined below two alternatives. The company's MARR is 14% per year. Alternative A: For $9 million now, a contractor will provide the necessary number of machines now and in the future, for as long as the company needs them. The annual contract fee is a total of $1.35X with no additional per-machine annual cost. There is no time limit placed on the contract, and the costs do not escalate. Alternative B: The company buys its own machines for $280,000 each and expends an estimated SX per machine in annual operating cost. The machines in this alternative need to be replaced every five years. Perform a capitalized cost evaluation and state which alternative is recommended and why?

Answer rating: 100% (QA)

Alternative M Year Cost Revenue Salvage Value Net Cashflow PVFPVIFA 11 Discounted Value N PVF 11 P... View the full answer