The manager of a canned food processing plant must decide between two different labeling machines. The estimated cash flows are shown in Table below. Which one should be selected on the basis of Present Worth (PW) analysis at 10% per year? Machine A Machine B First cost, $ - 42,000 - 51,000 Annual operating - 28,000 - 17,000 cost, $ 10% of initial Salvage value, $ 10% of initial cost cost Life, years 4 4 10% 10% TABLE 15 Discrete Cash Flow: Compound Interest Factors Uniform Series Payments Arithmetic Gradients Single Payments Capital Recovery A/P Gradient Present Worth P/G Gradient Uniform Series A/G Compound Present Compound Amount Present Worth Sinking Fund Amount Worth P/F A/F F/A P/A F/P 1.1000 0.9091. 1.00000 1.0000 1.10000 0.9091 0.4762 0.47619 2.1000 0.57619 1.7355 0.8264 1.2100 0.8264 0.9366 3.3100 0.40211 2.4869 2.3291 1.3310 0.7513 0.30211 1.3812 0.31547 3.1699 4.3781 1.4641 0.6830 0.21547 4.6410 1.8101 4. 6.8618 9.6842 12.7631 3.7908 0.16380 0.12961 6.1051 7.7156 • 0.26380 0.22961 .5 1.6105 0.6209 4.3553 .2.2236 1.7716 0.5645 2.6216 6. 9.4872 0.20541 4.8684 0.10541 3.0045 3.3724 1.9487 0.5132 16.0287 19.4215 11.4359 0.18744 5.3349 0.4665 0.08744 2.1436 2.3579 8 0.17364 5.7590 0.4241 0.07364 13.5795 22.8913 3.7255 6.1446 0.06275 15.9374 0.16275 2.5937 0.3855 10
The manager of a canned food processing plant must decide between two different labeling machines. The estimated cash flows are shown in Table below. Which one should be selected on the basis of Present Worth (PW) analysis at 10% per year? Machine A Machine B First cost, $ - 42,000 - 51,000 Annual operating - 28,000 - 17,000 cost, $ 10% of initial Salvage value, $ 10% of initial cost cost Life, years 4 4 10% 10% TABLE 15 Discrete Cash Flow: Compound Interest Factors Uniform Series Payments Arithmetic Gradients Single Payments Capital Recovery A/P Gradient Present Worth P/G Gradient Uniform Series A/G Compound Present Compound Amount Present Worth Sinking Fund Amount Worth P/F A/F F/A P/A F/P 1.1000 0.9091. 1.00000 1.0000 1.10000 0.9091 0.4762 0.47619 2.1000 0.57619 1.7355 0.8264 1.2100 0.8264 0.9366 3.3100 0.40211 2.4869 2.3291 1.3310 0.7513 0.30211 1.3812 0.31547 3.1699 4.3781 1.4641 0.6830 0.21547 4.6410 1.8101 4. 6.8618 9.6842 12.7631 3.7908 0.16380 0.12961 6.1051 7.7156 • 0.26380 0.22961 .5 1.6105 0.6209 4.3553 .2.2236 1.7716 0.5645 2.6216 6. 9.4872 0.20541 4.8684 0.10541 3.0045 3.3724 1.9487 0.5132 16.0287 19.4215 11.4359 0.18744 5.3349 0.4665 0.08744 2.1436 2.3579 8 0.17364 5.7590 0.4241 0.07364 13.5795 22.8913 3.7255 6.1446 0.06275 15.9374 0.16275 2.5937 0.3855 10
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The manager of a canned food processing plant must decide between two different labeling
machines. The estimated cash flows are shown in Table below. Which one should be selected
on the basis of Present Worth (PW) analysis at 10% per year?
Machine A
Machine B
First cost, $
- 42,000
- 51,000
Annual operating
- 28,000
- 17,000
cost, $
10% of initial
Salvage value, $
10% of initial cost
cost
Life, years
4
4
10%
10%
TABLE 15
Discrete Cash Flow: Compound Interest Factors
Single Payments
Uniform Series Payments
Arithmetic Gradients
Gradient
Uniform Series
Gradient
Capital
Recovery
A/P
Present
Sinking
Fund
Compound
Amount
Compound
Present
Worth
Present Worth
Amount
Worth
P/A
P/G
A/G
F/P
P/F
A/F
F/A
1.0000
1.10000
0.9091
1.1000
0.9091,
1.00000
0.4762
2.1000
0.57619
1.7355
0.8264
1.2100
0.8264
0.47619
0.9366
0.40211
2.4869
2.3291
3
1.3310
0.7513
0.30211
3.3100
1.3812
0.31547
3.1699
4.3781
1.4641
0.6830
0.21547
4.6410
1.8101
4.
0.26380
3.7908
6.8618
1.6105
0.6209
0.16380
6.1051
9.6842
2.2236
.5
7.7156
0.22961
4.3553
1.7716
0.5645
0.12961
12.7631
2.6216
9.4872
0.20541
4.8684
7.
1.9487
0.5132
0.10541
16.0287
3.0045
11.4359
0.18744
5.3349
0.08744
3.3724
0.4665
0.4241
8.
2.1436
5.7590
19.4215
0.07364
13.5795
0.17364
3.7255
9.
2.3579
6.1446
22.8913
0.06275
15.9374
0.16275
2.5937
0.3855
10
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education