Old Southwest Canning Co. has determined that any one of four machines can be used in its chili-canning operation. The cost of the machines are estimated below, and all machines have a 5-year life. If the minimum attractive rate of return is 25% per year, determine which machine should be selected on the basis of a rate of return analysis. Machine 1 w First Cost, $ Round to the nearest two (2) decimal places -28,000 -51,000 -32,000 -33,000 Determine the incremental ROR for the first incremental CF, Ai*, (in %) AOC, $ -20,000 -12,000 -19,000 -18,000
Old Southwest Canning Co. has determined that any one of four machines can be used in its chili-canning operation. The cost of the machines are estimated below, and all machines have a 5-year life. If the minimum attractive rate of return is 25% per year, determine which machine should be selected on the basis of a rate of return analysis. Machine 1 w First Cost, $ Round to the nearest two (2) decimal places -28,000 -51,000 -32,000 -33,000 Determine the incremental ROR for the first incremental CF, Ai*, (in %) AOC, $ -20,000 -12,000 -19,000 -18,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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. Make sure do not round off answers in the solution, instead just the final answer will be rounded of to two decimal places. 3.
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