A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows:Packaging machine:XYZ Initial cost ($)20,00040,00015,000 Uniform annual benefit ($)120,000180,000100,000 Uniform annual O&M cost ($)70,00050,00070,000 Service life (years)6312 Salvage value end of life ($)2,0004,0002,000 The present worth (PW) for machine X over the 12 years analysis period is:

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Answered: A manufacturer with a MARR of 20% is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows:

Packaging machine:	X	Y	Z
Initial cost ($)	20,000	40,000	15,000
Uniform annual benefit ($)	120,000	180,000	100,000
Uniform annual O&M cost ($)	70,000	50,000	70,000
Service life (years)	6	3	12
Salvage value end of life ($)	2,000	4,000	2,000

The present worth (PW) for machine X over the 12 years analysis period is:

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