Question: please answer question 6 6. (3 points) A company is planning to install a new automated plastic-molding press. Four different presses are available. The initial
6. (3 points) A company is planning to install a new automated plastic-molding press. Four different presses are available. The initial capital investments and annual expenses for these four mutually exclusive alternatives are as follows: Capital investment Useful life (years) Annual expenses Press P1 $24,000 7 $31,200 P2 $30,400 7 $29,128 P3 $49,600 7 $25,192 P4 $52,000 7 $22,880 Assume that each press has the same output capacity (120,000 units per year) and has no market value at the end of its useful life; the selected analysis period is seven years; and any additional capital invested is expected to earn at least 10% per year. Which press should be chosen if 120,000 nondefective units per year are produced by each press and all units can be sold? The selling price is $0.375 per unit. Fill in the following table: Press P1 P2 P3 P4 PW AW FW
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
