Question: This problem is related to an engineering economic cla.(MUST SHOW ALL WORK AND ANY FORMULA'S USED) Two pieces of equipment are being considered. Machine A

This problem is related to an engineering economic cla.(MUST SHOW ALL WORK AND ANY FORMULA'S USED)

Two pieces of equipment are being considered. Machine A costs $1,000 and has a useful life of 8 years. At the end of 8 years it can be salvaged for $175. Machine B costs $2,000 and also has a useful life of 8 years and can be salvaged for $500 at the end of its life. If the interest rate is 8% and Machine A has a net annual benefit of $225, what must the net annual benefit of Machine B be for the two machines to be equally desirable?

a. $368 b. $406 c. $582 d. $1,000

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