4. 4.28 Machines that have the following costs are under consideration for a robotized welding process. Use an interest rate of 10% per year and PW analysis to determine which machine should be selected. Show (a)

factor, and

(b) spreadsheet solutions, as instructed.

(c) Use your spreadsheet to determine if the choice is different when management restricts all evaluations to a 3-year study period. Assume the market value of Y remains at $95,000.

Table Summary: Table divided into 3 columns with the headings marked from left to right as: Basis; Machine X; Machine Y.

Machine X Machine Y First cost, $ −250, 000 −430, 000 AOC, $ per year −60, 000 −40, 000 Machine X Machine Y Salvage value, $ 70,000 95,000 Life, years 3 6