A Company Is Considering Buying One Of The Following Two Machines.Machine AMachine B$3,900$1,800$5,550$3,100Initial costSalvagevalue13 years$ 275 (year 1to 8)Useful life10 yearsAnnual398 year 1 to 10maintenance$425 (year 9to 13)Interest rate6%6%1. What is the equivalent uniform annual cost of Machine B?2. What is the equivalent uniform annual cost of Machine A?

Initial Cost 3900 5550 Salvage Value 1800 3100 Useful Life 10 13 Annual Maintenance 398…

A Company Is Considering Buying One Of The Following Two Machines. Machine A Machine B $3,900 $1,800 $5,550 $3,100 Initial cost Salvage value 10 years 13 years $ 275 (year 1 to 8) Useful life Annual 398 year 1 to 10 maintenance $425 (year 9 to 13) Interest rate 6% 6% 1. What is the equivalent uniform annual cost of Machine B? 2. What is the equivalent uniform annual cost of Machine A?

A Company Is Considering Buying One Of The Following Two Machines. Machine A Machine B $3,900 $1,800 $5,550 $3,100 Initial cost Salvage value 10 years 13 years $ 275 (year 1 to 8) Useful life Annual 398 year 1 to 10 maintenance $425 (year 9 to 13) Interest rate 6% 6% 1. What is the equivalent uniform annual cost of Machine B? 2. What is the equivalent uniform annual cost of Machine A?

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

100%

A Company Is Considering Buying One Of The Following Two Machines.
Machine A
Machine B
$3,900
$1,800
$5,550
$3,100
Initial cost
Salvage
value
13 years
$ 275 (year 1
to 8)
Useful life
10 years
Annual
398 year 1 to 10
maintenance
$425 (year 9
to 13)
Interest rate
6%
6%
1. What is the equivalent uniform annual cost of Machine B?
2. What is the equivalent uniform annual cost of Machine A?

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