The following annual costs are associated with three new machines for use in a Styrofoam cup plant. Use Rate of Return Analysis to choose which Equipment should the company choose. if the MRR is 10%. Data A В C Useful Life, Years 9. 13 11 First Cost $2,300,000 $2,780,000 $2,540,000 Salvage Value $82,000 $118,000 $97,000 Annual Benefit $580,000 $670,000 $650,000 M&O $65,000 $78,000 $71,000 M&O Gradient $11,000 $15,000 $12,500

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The following annual costs are associated with three new machines for use in a Styrofoam
cup plant.
Use Rate of Return Analysis to choose which Equipment should the company choose. if the
MRR is 10%.
Data
A
В
C
Useful Life, Years
9.
13
11
First Cost
$2,300,000 $2,780,000 $2,540,000
Salvage Value
$82,000
$118,000
$97,000
Annual Benefit
$580,000 $670,000 $650,000
M&O
$65,000
$78,000
$71,000
M&O Gradient
$11,000
$15,000
$12,500
Transcribed Image Text:The following annual costs are associated with three new machines for use in a Styrofoam cup plant. Use Rate of Return Analysis to choose which Equipment should the company choose. if the MRR is 10%. Data A В C Useful Life, Years 9. 13 11 First Cost $2,300,000 $2,780,000 $2,540,000 Salvage Value $82,000 $118,000 $97,000 Annual Benefit $580,000 $670,000 $650,000 M&O $65,000 $78,000 $71,000 M&O Gradient $11,000 $15,000 $12,500
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