Data for two machines P and Q are as shown below. At what MARR will both machines be equally attractive for installation? Machine Q Machine Initial cost $125.000 $275.000
Data for two machines P and Q are as shown below. At what MARR will both machines be equally attractive for installation? Machine Q Machine Initial cost $125.000 $275.000
Chapter1: Making Economics Decisions
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![Data for two machines P and Q are as shown below. At what
MARR will both machines be equally attractive for installation?
Machine
Machine
Initial cost
$125,000 $275,000
Life in years
4
Inflation per year (for all costs)
2.00%
Benefit increase per year
4.50%
MARR per year compounded yearly
12.00%
Project life in years
12
First
year
estimated costs
$33,750
$63,250
First year estimated benefits
$65,000
$112,750
Salvage value of machine (% of
initial cost)
12.00%
8.00%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F41cad378-5875-4c92-837f-f5fcc3a48de0%2F109e2b3a-89c6-407a-8f7e-69a205dd42ad%2Fufoasp7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Data for two machines P and Q are as shown below. At what
MARR will both machines be equally attractive for installation?
Machine
Machine
Initial cost
$125,000 $275,000
Life in years
4
Inflation per year (for all costs)
2.00%
Benefit increase per year
4.50%
MARR per year compounded yearly
12.00%
Project life in years
12
First
year
estimated costs
$33,750
$63,250
First year estimated benefits
$65,000
$112,750
Salvage value of machine (% of
initial cost)
12.00%
8.00%
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