Question: The machines shown below are under consideration for an improvement to an automated candy bar wrapping process. Machine C Machine D First cost, $ 40,000

The machines shown below are under consideration for an improvement to an automated candy bar wrapping process.

Machine C

Machine D

First cost, $

40,000

75,000

Annual cost, $/year

15,000

10,000

Salvage value, $

12,000

25,000

Life, years

3

6

(Source: Blank and Tarquin)

Based on the data provided and using an interest rate of 5% per year, the Capital Recovery CRof Machine D is closest to:

(All the alternatives presented below were calculated using compound interest factor tables including all decimal places)

CRd = -$11,101

CRd = -$18,452

CRd = -$24,776

CRd = -$14,777

Based on the data provided and using an interest rate of 5% per year, the Annual Worth AW of Machine D is closest to:

(All the alternatives presented below were calculated using compound interest factor tables including all decimal places)

AWd = -$220,630

AWd = -$29,611

AWd = -$21,101

AWd = -$12,071

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