Two machines A and B are being considered for use in a small manufacturing plant. Machine A has a first cost of P125 000.00, an estimated life of seven years and a salvage value of P12 500.00. Annual operations and maintenance cost is estimated to be P1 0 000.00. The corresponding figures of machine B are P175 000.00, seven years, P25 000.00, and P8500.00. Using future worth analysis and an interest rate of 14%, specify which machine should be preferred.
Two machines A and B are being considered for use in a small manufacturing plant. Machine A has a first cost of P125 000.00, an estimated life of seven years and a salvage value of P12 500.00. Annual operations and maintenance cost is estimated to be P1 0 000.00. The corresponding figures of machine B are P175 000.00, seven years, P25 000.00, and P8500.00. Using future worth analysis and an interest rate of 14%, specify which machine should be preferred.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Two machines A and B are being considered for use in a small manufacturing plant. Machine A has a first cost of P125 000.00, an estimated life of seven years and a salvage value of P12 500.00. Annual operations and maintenance cost is estimated to be P1 0 000.00. The corresponding figures of machine B are P175 000.00, seven years, P25 000.00, and P8500.00. Using future worth analysis and an interest rate of 14%, specify which machine should be preferred. (Ans. Select Machine A, - P407.588.51)
-please use an actual formula NOT AN EXCEL PLEASE
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