Pls provide Cash flow diagram if need. thank you PROBLEM #5:The manager in a canned food processing plant is trying to decide between two labelling machines.Their respective cost and benefits are as follows:Machine AMachine BFirst Cost$15,000$25,000O&M cost$1,600$400Annual income$8,000$13,000Life of building, in years.10Salvage value$3,000$3,000Assume an interest rate of 12%. Use annual cash flow analysis to determine when machine shouldbe selected.

*Answer: Net annual benefit (NAB) = Annual benefit - O&M Cost NAB, Machine A = 8,000 - 1,600 =…

Machine A Machine B First Cost $15,000 $25,000 O&M cost $1,600 $400 Annual income $8,000 $13,000 Life of building, in years. 7 10 Salvage value $3,000 $3,000 Assume an interest rate of 12%. Use annual cash flow analysis to determine when machine sh be selected.

Machine A Machine B First Cost $15,000 $25,000 O&M cost $1,600 $400 Annual income $8,000 $13,000 Life of building, in years. 7 10 Salvage value $3,000 $3,000 Assume an interest rate of 12%. Use annual cash flow analysis to determine when machine sh be selected.

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

Pls provide Cash flow diagram if need. thank you

PROBLEM #5:
The manager in a canned food processing plant is trying to decide between two labelling machines.
Their respective cost and benefits are as follows:
Machine A
Machine B
First Cost
$15,000
$25,000
O&M cost
$1,600
$400
Annual income
$8,000
$13,000
Life of building, in years.
10
Salvage value
$3,000
$3,000
Assume an interest rate of 12%. Use annual cash flow analysis to determine when machine should
be selected.

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MANUAL SOLUTION AND CASH FLOW DIAGRAM