Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis? Machine X Machine Y First cost, $ -200,000 -400,000 Annual operating cost, $ per year -40,000 -50,000 Salvage value, S 80,000 90,000 Life, years 3 6 Solution: PW Machine X- S (Use the right sign) PW Machine Y= $ (Use the right sign) So, the best alternative is Machine

Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis? Machine X Machine Y First cost, $ -200,000 -400,000 Annual operating cost, $ per year -40,000 -50,000 Salvage value, S 80,000 90,000 Life, years 3 6 Solution: PW Machine X- S (Use the right sign) PW Machine Y= $ (Use the right sign) So, the best alternative is Machine

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.15E

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