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QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years.                                             Company    Company     Company                                                      A                   B                C First cost                                $15,000        $25,000      $20,000 Maintenance and operating    1,600              400            900 Annual benefit                        8,000             13,000        9,000 Salvage value                          3,000             6,000          4,500   (a) Construct a choice table for interest rates from 0% to 100%. (b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis.

QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years.                                             Company    Company     Company                                                      A                   B                C First cost                                $15,000        $25,000      $20,000 Maintenance and operating    1,600              400            900 Annual benefit                        8,000             13,000        9,000 Salvage value                          3,000             6,000          4,500   (a) Construct a choice table for interest rates from 0% to 100%. (b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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8-18

QZY, Inc. is evaluating new widget machines offered by three

companies. The chosen machine will be used for 3 years.

                                            Company    Company     Company

                                                     A                   B                C

First cost                                $15,000        $25,000      $20,000

Maintenance and operating    1,600              400            900

Annual benefit                        8,000             13,000        9,000

Salvage value                          3,000             6,000          4,500

 

(a) Construct a choice table for interest rates from 0% to 100%.

(b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis.

 

 

 

Only use Excel please 

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