Spectrum Imaging Systems is considering the purchase of a new printer based on recent contracts it received for printing weekly magazines and mail-out advertising materials. The operating costs and revenues generated are related to a large extent to the speed and other capabilities of the printer. Spectrum uses a 3-year planning period and a MARR of 15% per year. Which of the four printers detailed below should the company acquire on the basis of an incremental ROR analysis? Printer NX-1 Nx-2 Nx-3 Nx-4 First Cost, $ - 500,000 - 600,000 - 650,000 -750,000 AOC, $ per year - 350,000 - 300,000 - 275,000 - 200,000 Revenue, $ per year 450,000 460,000 480,000 510,000 Salvage Value, $ 70,000 85,000 95,000 120,000
Spectrum Imaging Systems is considering the purchase of a new printer based on recent contracts it received for printing weekly magazines and mail-out advertising materials. The operating costs and revenues generated are related to a large extent to the speed and other capabilities of the printer. Spectrum uses a 3-year planning period and a MARR of 15% per year. Which of the four printers detailed below should the company acquire on the basis of an incremental ROR analysis? Printer NX-1 Nx-2 Nx-3 Nx-4 First Cost, $ - 500,000 - 600,000 - 650,000 -750,000 AOC, $ per year - 350,000 - 300,000 - 275,000 - 200,000 Revenue, $ per year 450,000 460,000 480,000 510,000 Salvage Value, $ 70,000 85,000 95,000 120,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Spectrum Imaging Systems is considering the purchase of a new printer based on recent
contracts it received for printing weekly magazines and mail-out advertising materials. The
operating costs and revenues generated are related to a large extent to the speed and other
capabilities of the printer. Spectrum uses a 3-year planning period and a MARR of 15%
per year. Which of the four printers detailed below should the company acquire on the basis
of an incremental ROR analysis?
Printer
NX-1
NX-2
Nx-3
Nx-4
First
Cost, $
-500,000
- 600,000
- 650,000
- 750,000
AOC,
$ per year
- 350,000
- 300,000
- 275,000
- 200,000
Revenue,
$ per year
450,000
460,000
480,000
510,000
Salvage
Value, $
70,000
85,000
95,000
120,000
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