Empire Limited is trying to decide between two machines which are necessary in their manufacturing facility. Data concerning the two machines are presented below. If the company has a minimum attractive rate of return (MARR) of 10%, which machine should be chosen?

Use co-terminated assumption (5 years) and compare using Present Worth Method.

Note: Show final answer to the nearest WHOLE NUMBER

Answer the following:

a. The Present Worth of Alternative A is = $ Blank 1

b. The Present Worth of Alternative B is = $ Blank 2

c. Choose Alternative (Type only A or B) = Blank 3

Transcribed Image Text:

First Cost Annual Operating Cost Salvage Value Useful life Machine A $45,000 $31,000 $10,000 8 years Machine B $24,000 $35,000 $8,000 5 years First Cost Annual Operating Cost Salvage Value Useful life Machine A $45,000 $31,000 $10,000 8 years Machine B $24,000 $35,000 $8,000 5 years

Answer rating: 100% (QA)

9 Present worth of Alternative A PW A first cost operating cost PA 10 ... View the full answer