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
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 3SCQ: Compute the inflation rate for fruit prices from 2001 to 2004.
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