The following annual costs are associated with three new extruder machines being considered for use na Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,500,000 $105,000 $199,000 $65,000 $16,000 X-TRUD 13 $2,620,000 $109,000 $614,000 $80,000 $14,500 O Choosing SUPR-X is best because it has the highest Annual Benefit SUPR-X O Choosing SUPR-X is best because it has the lowest M&O cost in vr1 7 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. $2,020,00 $117,000 $671,000 $56,000 $11,000 O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than X-TRUD. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than X-TRUD.
The following annual costs are associated with three new extruder machines being considered for use na Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,500,000 $105,000 $199,000 $65,000 $16,000 X-TRUD 13 $2,620,000 $109,000 $614,000 $80,000 $14,500 O Choosing SUPR-X is best because it has the highest Annual Benefit SUPR-X O Choosing SUPR-X is best because it has the lowest M&O cost in vr1 7 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. $2,020,00 $117,000 $671,000 $56,000 $11,000 O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than X-TRUD. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than X-TRUD.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![The following annual costs are associated with three new extruder machines being considered for use
in a Styrofoam cup plant:
Data
Useful Life, Years
First Cost
Salvage Value
Annual Benefit
M&O
M&O Gradient
X
17
$2,500,000
$105,000
$199,000
$65,000
$16,000
X-TRUD
13
$2,620,000
$109,000
$614,000
$80,000
$14,500
O Choosing SUPR-X is best because it has the highest Annual Benefit
Choosing SUPR-X is best because it has the lowest M&O cost in yr1
SUPR-X
7
$2,020,000
$117,000
$671,000
$56,000
$11,000
The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose?
Use Annual Cash Flow Analysis and provide the right reason.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than
X-TRUD.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than
X-TRUD.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7a20aa0d-d4cf-44cb-aa33-abf25e453c51%2F7c1f5efc-d6dd-4a4a-a8f8-f9d02adf1588%2Fovljyq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following annual costs are associated with three new extruder machines being considered for use
in a Styrofoam cup plant:
Data
Useful Life, Years
First Cost
Salvage Value
Annual Benefit
M&O
M&O Gradient
X
17
$2,500,000
$105,000
$199,000
$65,000
$16,000
X-TRUD
13
$2,620,000
$109,000
$614,000
$80,000
$14,500
O Choosing SUPR-X is best because it has the highest Annual Benefit
Choosing SUPR-X is best because it has the lowest M&O cost in yr1
SUPR-X
7
$2,020,000
$117,000
$671,000
$56,000
$11,000
The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose?
Use Annual Cash Flow Analysis and provide the right reason.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than
X-TRUD.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than
X-TRUD.
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