FIT is trying to decide which company to purchase a three D printing machine. Using the Incremental Rate of Return analysis, which company should FIT choose? MARR is 8% |Acme Corp. ACE Corp. First Cost 65,000 50,000 Revenue per 2500 2000 year 250 Revenue increases per 300 year Salvage Value 10,000 5,000 Useful Life 3 6

FIT is trying to decide which company to purchase a three D printing machine. Using the Incremental Rate of Return analysis, which company should FIT choose? MARR is 8% |Acme Corp. ACE Corp. First Cost 65,000 50,000 Revenue per 2500 2000 year 250 Revenue increases per 300 year Salvage Value 10,000 5,000 Useful Life 3 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

FIT is trying to decide which company to purchase a three D printing machine. Using
the Incremental Rate of Return analysis, which company should FIT choose? MARR is 8%
|Acme Corp.
ACE Corp.
First Cost
65,000
50,000
Revenue per 2500
2000
year
250
Revenue
increases per
300
year
Salvage Value 10,000
5,000
Useful Life
3
6

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Example A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: Freeze Type A Type B First cost P200,000 P300,000 Annual Operating Cost P32,000 P24,000 D Annual Labor Cost P50,000 P32,000 Insurance and Property Taxes 3% 3% Payroll Taxes 4% 4% Estimated Life TO 10 If the minimum required rate of return is 15%, which equipment should be selected?
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