ABC Beverage purchases cans in bulk from Wald-China Can Corporation. The finish on the anodized aluminum surface is produced by mechanical finishing technologies called brushing or bead blasting. Engineers at Wald are switching to more efficient, faster, and cheaper machines. Use a MARR of 10% per year to select between the two alternatives below: Brush Bead Blasting $475,000 First cost AOC Salvage value Life $475,000 $60,000 in Year 1, decreasing by $2,000 annually starting in Year 2 $50,000 6 years $58,000 $0 Very long Brushing with an AW = -$105,500 Brushing with an AW = -$167,031 Bead Blasting with an AW = -$105,500 Bead Blasting with an AW = -$167,031
ABC Beverage purchases cans in bulk from Wald-China Can Corporation. The finish on the anodized aluminum surface is produced by mechanical finishing technologies called brushing or bead blasting. Engineers at Wald are switching to more efficient, faster, and cheaper machines. Use a MARR of 10% per year to select between the two alternatives below: Brush Bead Blasting $475,000 First cost AOC Salvage value Life $475,000 $60,000 in Year 1, decreasing by $2,000 annually starting in Year 2 $50,000 6 years $58,000 $0 Very long Brushing with an AW = -$105,500 Brushing with an AW = -$167,031 Bead Blasting with an AW = -$105,500 Bead Blasting with an AW = -$167,031
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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