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A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the table below. Which machine should be selected if the MARR is 12% per year? Assumptions: The facility will operate 1,750 hours per year. Machine availability is 75% for Machine D1 and 70% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 1,750 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. Assume repeatability. Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when i=12% per year. The total equivalent annual cost of owning a required number of machines D1 is S. (Round to the nearest hundreds.) The total equivalent annual cost of owning a required number of machines D2 is S. (Round to the nearest hundreds.) Which machine should be selected? Choose the correct answer below. O D1 O D2 Data table R-43 T-22 Product Capital investment Useful life Annual expenses Market value Machine D1 2,200 hours 1,100 hours 3,300 hours 16,000/machine six years 4,500/machine 3,500/machine Print Done Machine D2 850 hours 1,550 hours 2,400 hours 22,500/machine eight years 7,000/machine 5,000/machine - X

A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the table below. Which machine should be selected if the MARR is 12% per year? Assumptions: The facility will operate 1,750 hours per year. Machine availability is 75% for Machine D1 and 70% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 1,750 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. Assume repeatability. Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when i=12% per year. The total equivalent annual cost of owning a required number of machines D1 is S. (Round to the nearest hundreds.) The total equivalent annual cost of owning a required number of machines D2 is S. (Round to the nearest hundreds.) Which machine should be selected? Choose the correct answer below. O D1 O D2 Data table R-43 T-22 Product Capital investment Useful life Annual expenses Market value Machine D1 2,200 hours 1,100 hours 3,300 hours 16,000/machine six years 4,500/machine 3,500/machine Print Done Machine D2 850 hours 1,550 hours 2,400 hours 22,500/machine eight years 7,000/machine 5,000/machine - X

ENGR.ECONOMIC ANALYSIS
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 new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the table below. Which machine should be selected if the MARR is 12% per year? Assumptions: The facility will operate 1,750 hours per year. Machine availability 75% for Machine D1 and 70% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 1,750 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. Assume repeatability. Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. The total equivalent annual cost of owning a required number of machines D1 is $. (Round to the nearest hundreds.) The total equivalent annual cost of owning a required number of machines D2 is $ (Round to the nearest hundreds.) Which machine should be selected? Choose the correct answer below. O D1 O D2 C Data table R-43 T-22 Product Capital investment Useful life Annual expenses Market value Machine D1 2,200 hours 1,100 hours 3,300 hours 16,000/machine six years 4,500/machine 3,500/machine Print Done Machine D2 850 hours 1,550 hours 2,400 hours 22,500/machine eight years 7,000/machine 5,000/machine - X
Transcribed Image Text:A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the table below. Which machine should be selected if the MARR is 12% per year? Assumptions: The facility will operate 1,750 hours per year. Machine availability 75% for Machine D1 and 70% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 1,750 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. Assume repeatability. Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. The total equivalent annual cost of owning a required number of machines D1 is $. (Round to the nearest hundreds.) The total equivalent annual cost of owning a required number of machines D2 is $ (Round to the nearest hundreds.) Which machine should be selected? Choose the correct answer below. O D1 O D2 C Data table R-43 T-22 Product Capital investment Useful life Annual expenses Market value Machine D1 2,200 hours 1,100 hours 3,300 hours 16,000/machine six years 4,500/machine 3,500/machine Print Done Machine D2 850 hours 1,550 hours 2,400 hours 22,500/machine eight years 7,000/machine 5,000/machine - X
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