A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data are as follows: Туре А Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10 If the minimum required rate of return is 19%, 1. What is the annual worth of Type A? [ Select ] 2. What is the annual worth of Type B? [ Select ] 3. Which machine should be selected? [ Select ]
A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data are as follows: Туре А Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10 If the minimum required rate of return is 19%, 1. What is the annual worth of Type A? [ Select ] 2. What is the annual worth of Type B? [ Select ] 3. Which machine should be selected? [ Select ]
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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![A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on
different types of this equipment. In the monthly meeting, the purchasing department presented a report
about the two types of equipment that they have found. Pertinent data are as follows:
Туре А
Туре В
First cost
P250,000
P350,000
Annual operating cost
30,000
22,000
Annual labor cost
52,000
34,000
Insurance and property taxes
3%
3%
Labor/Payroll taxes
4%
4%
Estimated life
10
10
If the minimum required rate of return is 19%,
1. What is the annual worth of Type A? [ Select ]
2. What is the annual worth of Type B? [ Select ]
3. Which machine should be selected? [ Select ]
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f3050c2-2384-41a0-8659-464acda16b56%2F703b9b24-5b47-40a8-ac9e-38696ac95cce%2Fbv9lfsc_processed.png&w=3840&q=75)
Transcribed Image Text:A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on
different types of this equipment. In the monthly meeting, the purchasing department presented a report
about the two types of equipment that they have found. Pertinent data are as follows:
Туре А
Туре В
First cost
P250,000
P350,000
Annual operating cost
30,000
22,000
Annual labor cost
52,000
34,000
Insurance and property taxes
3%
3%
Labor/Payroll taxes
4%
4%
Estimated life
10
10
If the minimum required rate of return is 19%,
1. What is the annual worth of Type A? [ Select ]
2. What is the annual worth of Type B? [ Select ]
3. Which machine should be selected? [ Select ]
>
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