! Required information The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 12% per year and that the inflation rate is 4.3% per year. Machine A B First Cost, $ -152,000 -900,000 M&O, $ per year -70,000 -5,000 Salvage Value, $ 40,000 200,000 Life, years 5 00 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 $
! Required information The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 12% per year and that the inflation rate is 4.3% per year. Machine A B First Cost, $ -152,000 -900,000 M&O, $ per year -70,000 -5,000 Salvage Value, $ 40,000 200,000 Life, years 5 00 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 $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Vijay
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Required information
The two machines shown are being considered for a chip manufacturing operation.
Assume the MARR is a real return of 12% per year and that the inflation rate is 4.3% per
year.
Machine
A
B
First Cost, $
-152,000
-900,000
M&O, $ per year
-70,000
-5,000
Salvage Value, $
40,000
200,000
Life, years
5
00
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 $
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