A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data are as follows: Туре А Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10 If the minimum required rate of return is 19%, 1. What is the annual worth of Type A? [ Select ] 2. What is the annual worth of Type B? [ Select ] 3. Which machine should be selected? [ Select ]

A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data are as follows: Туре А Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10 If the minimum required rate of return is 19%, 1. What is the annual worth of Type A? [ Select ] 2. What is the annual worth of Type B? [ Select ] 3. Which machine should be selected? [ Select ]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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