7. 6.64 If a 6-year study period is used for an ROR evaluation, the incremental cash flow between machines B and A in year 3 is closest to:

1. $1200 2. $4200 3. $12,000 4. $13,200 Table Summary: Table divided into 2 columns with the first column showing the items and the second column, Machine, being further divided into 2 sub-columns, A and B.

Machine A B First cost, $ −15,000 −25,000 Annual operating cost, $ −1,600 −400 Salvage value, $ 3,000 6,000 Life, years 3 6