7-41. Two alternative machines will produce the same product, but one is capable of higher-quality work, which

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7-41. Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data: Machine A Machine B Capital investment $20,000 $30,000 Life 12 years 8 years Terminal BV (and MV) $4,000 $0 Annual receipts $150,000 $188,000 Annual expenses $138,000 $170,000 Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 40%, and an after-tax MARR of 10%. (7.9)

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Engineering Economy

ISBN: 9780134870069

17th Edition

Authors: William Sullivan, Elin Wicks, C Koelling

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