OLVE STEP BY STEP Carp, Inc. wants to evaluate two machines for packaging their products. Machine A: Initial cost is $700,00 1st year O&M cost is 18,000; this cost increases $900 each year. The annual benefits are $154,000 It can be sold at the end of 10 years useful life for $145,000 Machine B: Initial cost is $1,600,00 1st year O&M cost is 28,000; this cost increases $650 each year. The annual benefits are $300,000 It can be sold at the end of 20 years useful life for $210,000 The companies uses an interest rate of 15% Use annual cash flow analysis to decide which is the most desirable alternative.
OLVE STEP BY STEP Carp, Inc. wants to evaluate two machines for packaging their products. Machine A: Initial cost is $700,00 1st year O&M cost is 18,000; this cost increases $900 each year. The annual benefits are $154,000 It can be sold at the end of 10 years useful life for $145,000 Machine B: Initial cost is $1,600,00 1st year O&M cost is 28,000; this cost increases $650 each year. The annual benefits are $300,000 It can be sold at the end of 20 years useful life for $210,000 The companies uses an interest rate of 15% Use annual cash flow analysis to decide which is the most desirable alternative.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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Transcribed Image Text:ФЫ В А П Р О ВАПРОЛДЗАПРОЛДЖЭ
ЯЧСМИТНЧСМИТЬБНСМИТЬБЮ
SOLVE STEP BY STEP
2 Carp, Inc. wants to evaluate two machines for
3 packaging their products.
4
Machine A:
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Initial cost is $700,00
1st year O&M cost is 18,000; this cost
increases $900 each year.
The annual benefits are $154,000
It can be sold at the end of 10 years useful
life for $145,000
Machine B:
Initial cost is $1,600,00
1st year O&M cost is 28,000; this cost
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19 life for $210,000
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increases $650 each year.
The annual benefits are $300,000
It can be sold at the end of 20 years useful
The companies uses an interest rate of 15%
22
Use annual cash flow analysis to decide
23 which is the most desirable alternative.
24 Build model
ИЦУКЕНГ ШУКЕНТ ШЩ ЗКЕНГШ щзхъ
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