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Problem 14.056 The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 11% per year and that the inflation rate is 6.7% per year. Machine First Cost, $ M&O, $ per year Salvage Value, $ Life, years A -149,000 B -780,000 -70,000 -5,000 40,000 200,000 5 00 Problem 14.056.a: Compare two alternatives based on their AW values without inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Select machine B The annual worth of the alternative is $ -113800 Problem 14.056.b: Compare two alternatives based on their AW values with inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative? Select machine A The annual worth of the alternative is $ -21400

Problem 14.056 The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 11% per year and that the inflation rate is 6.7% per year. Machine First Cost, $ M&O, $ per year Salvage Value, $ Life, years A -149,000 B -780,000 -70,000 -5,000 40,000 200,000 5 00 Problem 14.056.a: Compare two alternatives based on their AW values without inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Select machine B The annual worth of the alternative is $ -113800 Problem 14.056.b: Compare two alternatives based on their AW values with inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative? Select machine A The annual worth of the alternative is $ -21400

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 11% per year and that the inflation rate is 6.7% per year. Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative?
Problem 14.056 The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 11% per year and that the inflation rate is 6.7% per year. Machine First Cost, $ M&O, $ per year Salvage Value, $ Life, years A -149,000 B -780,000 -70,000 -5,000 40,000 200,000 5 00 Problem 14.056.a: Compare two alternatives based on their AW values without inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Select machine B The annual worth of the alternative is $ -113800 Problem 14.056.b: Compare two alternatives based on their AW values with inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative? Select machine A The annual worth of the alternative is $ -21400
Transcribed Image Text:Problem 14.056 The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 11% per year and that the inflation rate is 6.7% per year. Machine First Cost, $ M&O, $ per year Salvage Value, $ Life, years A -149,000 B -780,000 -70,000 -5,000 40,000 200,000 5 00 Problem 14.056.a: Compare two alternatives based on their AW values without inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Select machine B The annual worth of the alternative is $ -113800 Problem 14.056.b: Compare two alternatives based on their AW values with inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative? Select machine A The annual worth of the alternative is $ -21400
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