2. Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis. Machine X Machine Y First Cost, $ -250,000 -430,000 Annual operating cost, $ -60,000 -40,000 per year Salvage value, $ 70,000 95,000 Life, years 8

2. Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis. Machine X Machine Y First Cost, $ -250,000 -430,000 Annual operating cost, $ -60,000 -40,000 per year Salvage value, $ 70,000 95,000 Life, years 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2.
Machines that have the following costs are under consideration for a robotized welding
process. Using an interest rate of 10% per year, determine which alternative should be
selected on the basis of a present worth analysis.
Machine X
Machine Y
First Cost, $
-250,000
-430,000
Annual operating cost, $ -60,000
per year
Salvage value, $
-40,000
70,000
95,000
Life, years
8.

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