Engineer Salem is faced with a decision to select one of the two machines. The cost and revenues are shown in the table. Machine B -100,00 50,000 80,000 Machine A -80,000 50,000 40,000 20,000 1 2 3 The machines will be needed for very long time. In the future, prices and benefits from the two machines will be almost the same. The company's MARR is 10%. From annual equivalent point of view, which machine Salem should select? They are indifferent Machine A Machine B Some assiumptions are need before the problem can be solved

Engineer Salem is faced with a decision to select one of the two machines. The cost and revenues are shown in the table. Machine B -100,00 50,000 80,000 Machine A -80,000 50,000 40,000 20,000 1 2 3 The machines will be needed for very long time. In the future, prices and benefits from the two machines will be almost the same. The company's MARR is 10%. From annual equivalent point of view, which machine Salem should select? They are indifferent Machine A Machine B Some assiumptions are need before the problem can be solved

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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Engineer Salem is faced with a decision to select one of the two machines. The cost and revenues are shown in the table.
Machine A
Machine B
-80,000
50,000
40,000
20,000
-100,00
50,000
80,000
1
3
The machines will be needed for very long time. In the future, prices and benefits from the two machines will be almost the same. The company's MARR is 10%. From annual
equivalent point of view, which machine Salem should select?
They are indifferent
Machine A
Machine B
Some assumptions are need before the problem can be solved

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