The Briggs and Stratton Commercial Division designs and manufactures small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled €œAlways Insta-Start€ does indeed work for every engine produced.

(a) Compare the annual worth values of the two systems at MARR = 10% per year. Select the better system.

(b) Determine the salvage value for the Push System that will make the company indifferent between the two systems.

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Pull System -1,500,000 Push System Equipment first cost, $ AOC, $ per year Salvage value, $ -2,250,000 -700,000 -600,000 100,000 50,000 8 Estimated life, years