Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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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