You have two machines under consideration for an improved automated wrapping process for Snickers Fun Size candy bars as detailed below. Using an AW analysis, determine which should be selected at i = 15% per year. Machine First cost, $ Annual cost, $/year Salvage value, $ Life, years C -40,000 -10,000 12,000 3 D -65,000 -12,000 25,000 6

You have two machines under consideration for an improved automated wrapping process for Snickers Fun Size candy bars as detailed below. Using an AW analysis, determine which should be selected at i = 15% per year. Machine First cost, $ Annual cost, $/year Salvage value, $ Life, years C -40,000 -10,000 12,000 3 D -65,000 -12,000 25,000 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Compare the alternatives below using AW and i = 10% per year D -350,000 -35,000 35,000 ∞ First Cost, $ Annual operating cost, $/year Salvage value, $ Life, years с -150,000 - 10,000 15,000 10
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A consulting engineering firm is considering two models of SUVs for the company principals. A GM model will have a first cost of $36,000, an operating cost of $4000, and a salvage value of $15,000 after 3 years. A Ford model will have a first cost of $32,000, an operating cost of $3100, and also have a $15,000 resale value, but after 4 years. (a) At an interest rate of 15% per year, which model should the consulting firm buy? Conduct an annual worth analysis. (b) What are the PW values for each vehicle?
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