Question: Please answer in detailed steps Your company has asked you to recommend a new machine. After months of hard research, you have collected the following

Please answer in detailed steps

Please answer in detailed steps Your company has asked you to recommend

Your company has asked you to recommend a new machine. After months of hard research, you have collected the following data: Data Alternative A Alternative B Initial Cost Annual Benefit Gradient Benefit (0 first year, G second year, 2G $285,000 88,000 1,300 73,000 1,200 third year ..etc.) e & Operating Cost 18,000 600 34,000 1,100 Gradient Maintenance&Operating Cost (0 first year, G second year, 2G third year...etc.) Salvage Value Life, Years 42,000 48,000 Discussions with the accounting department reveal that a loan must be secured to purchase any machine. The loan data to cover the initial cost are as follows: Data Alternative A Alternative B 30% Loan Period, Years Annual Loan Payment $34,392.11 $37,441.93 The loan payments will be made annually with 12% interest. Your company assumes a MARR equal to 15%. Answer the following questions: 37. The analysis period you should use is: a. 24 years b. 21 years c. 12 years d. 18 years 38. The rate that you are going to use in comparing the alternatives is: a. b. C. d. 12% 15% 30% 13% 39. The equivalent uniform annual worth of the benefits for Alternative A over its useful life is: a. $73,000 b. $79,101 c. $75,516 d. $71,901

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!