A factory has the following alternative: buy a used machine at a price of $10,000.00 or a new machine at a price of $30,000.00. Annual labor costs are $20,000 for the used machine and $15,000 for the new machine. The annual energy costs are $8,000.00 and $10,000.00 respectively. In the case of the used machine, the salvage value after 5 years would be nil, while that of the new machine would be equal to $5,000.00. Considering an MARR of 20% per year what is the best alternative? Use the equivalent annual cost
A factory has the following alternative: buy a used machine at a price of $10,000.00 or a new machine at a price of $30,000.00. Annual labor costs are $20,000 for the used machine and $15,000 for the new machine. The annual energy costs are $8,000.00 and $10,000.00 respectively. In the case of the used machine, the salvage value after 5 years would be nil, while that of the new machine would be equal to $5,000.00. Considering an MARR of 20% per year what is the best alternative? Use the equivalent annual cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A factory has the following alternative: buy a used machine at a price of $10,000.00 or a new machine at a price of $30,000.00. Annual labor costs are $20,000 for the used machine and $15,000 for the new machine. The annual energy costs are $8,000.00 and $10,000.00 respectively. In the case of the used machine, the salvage value after 5 years would be nil, while that of the new machine would be equal to $5,000.00. Considering an MARR of 20% per year what is the best alternative? Use the equivalent annual cost
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