It has been decided to install a machine in order to reduce the production costs in your
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Question:
It has been decided to install a machine in order to reduce the production costs in your company. In order to accomplish this, two machines have been selected. In both cases, the useful life of the machines is five years and there is no salvage value. It is anticipated that machine A will save $ per year and cost $ It is estimated that machine B will cost $ and that it will provide savings of $ for the first year, but an increase of $ annually will result in savings of $ for the second year, $ for the third year, etc.
Make a cash flow table for these machines. Points
Find the present worth for the current incremental ROR. Points
If the MARR is year which machine should be selected based on the incremental present worth ROR analysis? Points
Find the present worth using Points
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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