annual cash flow analysis

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1. The manager in a canned food processing plant is trying to decide between two labeling
machines. Assume an interest rate of 6%. Use annual cash flow analysis to determine which
machine should be chosen.
First cost
Maintenance and operating costs
Annual benefit
Salvage value
Useful life, in years
Machine A
$15,000
1,600
8,000
3,000
6
Machine B
$25,000
400
13,000
6,000
10
Transcribed Image Text:1. The manager in a canned food processing plant is trying to decide between two labeling machines. Assume an interest rate of 6%. Use annual cash flow analysis to determine which machine should be chosen. First cost Maintenance and operating costs Annual benefit Salvage value Useful life, in years Machine A $15,000 1,600 8,000 3,000 6 Machine B $25,000 400 13,000 6,000 10
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