Economics Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years. Alternative First cost, $ Annual operating cost, $/year Major Maintenance in year 4, S Salvage value, $ B -15,000 -28,000 -6,000 -9,000 -2000 3,000 5,000 Life, years Market value for machine A, at year 6 is 4,000, and 7,000 for machine O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6)= S- 57,069.82; Select machine A O 15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6) = 5-47,069.82; Select machine A O 28,000 - 9000(P/A,106,6) - 2000(P/F, 1096,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B O 28,000 - 9000(P/A 106,6) - 2000(P/F, 106,4) - 7000o(P/F,10%,6)= S-64,612.05; Select machine B
Economics Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years. Alternative First cost, $ Annual operating cost, $/year Major Maintenance in year 4, S Salvage value, $ B -15,000 -28,000 -6,000 -9,000 -2000 3,000 5,000 Life, years Market value for machine A, at year 6 is 4,000, and 7,000 for machine O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6)= S- 57,069.82; Select machine A O 15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6) = 5-47,069.82; Select machine A O 28,000 - 9000(P/A,106,6) - 2000(P/F, 1096,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B O 28,000 - 9000(P/A 106,6) - 2000(P/F, 106,4) - 7000o(P/F,10%,6)= S-64,612.05; Select machine B
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Economics
Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years.
Alternative
A
First cost, $
-15,000
-28.000
Annual operating cost, S/year
Major Maintenance in year 4, S
-6,000
-9,000
-2000
Salvage value,S
3,000
5,000
Life, years
Market value for machine A, at year 6 is 4,000, and 7,000 for machine
O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,106,6)= S- 57,069.82; Select machine A
O -15,000 - 6000(P/A,10%,6) - 12,000(P/F,10%,4) + 4000(P/F,10%,6) = 5-47,069.82; Select machine A
O -28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B
O 28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6)= S-64,612.05; Select machine B](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb41b0c04-0b87-4518-9cea-0603d51bdd1c%2F8e7b9341-cc12-43b9-9793-b69d231d82b8%2F017d7nd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Economics
Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years.
Alternative
A
First cost, $
-15,000
-28.000
Annual operating cost, S/year
Major Maintenance in year 4, S
-6,000
-9,000
-2000
Salvage value,S
3,000
5,000
Life, years
Market value for machine A, at year 6 is 4,000, and 7,000 for machine
O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,106,6)= S- 57,069.82; Select machine A
O -15,000 - 6000(P/A,10%,6) - 12,000(P/F,10%,4) + 4000(P/F,10%,6) = 5-47,069.82; Select machine A
O -28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B
O 28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6)= S-64,612.05; Select machine B
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