Machine A costs $42,000, lasts 3 years and has a salvage value of $8,500. Machine B costs $28,000, lasts 2 years and has a salvage value of $3,200. The machines can be purchased at the same price with the same salvage value in the future, and are needed for a 6 year project. Which machine would you purchase and why? Provide justification using an Annualized Equivalent Cost analysis. Interest is 10% annual rate, compounded annually.

Answer rating: 100% (QA)

To determine which machine to purchase we can perform an Annualized Equivalent Cost AEC analysis The ... View the full answer