Question 2 6pts! A company must decide whether to buy Machine A or Machine B. Based on the following cost information, using a rate of 10% per year, Determine the best alternative based on Present Worth Analysis (LCM assumption) and indicate the preferred choice if one of the two machines types is required to be chosen Show all work and show cash flow diagrams Machine A Machine B First cost $15,000 $25,000 Maintenance and 1,600 400 operating costs Annual benefit 8,000 13,000 Salvage value 3,000 6,000 Useful life, in years 3 6

Question 2 6pts! A company must decide whether to buy Machine A or Machine B. Based on the following cost information, using a rate of 10% per year, Determine the best alternative based on Present Worth Analysis (LCM assumption) and indicate the preferred choice if one of the two machines types is required to be chosen Show all work and show cash flow diagrams Machine A Machine B First cost $15,000 $25,000 Maintenance and 1,600 400 operating costs Annual benefit 8,000 13,000 Salvage value 3,000 6,000 Useful life, in years 3 6

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.2CE

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