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1. The costs and revenues of 2 alternatives for a machine are given below. Using the annual worth method, determine which alternative is economically viable
1. The costs and revenues of 2 alternatives for a machine are given below. Using the annual worth method, determine which alternative is economically viable when annualdiscount rate is (24.5\%) . (50 P) 2. A company wants to purchase a production system with an annual capacity of (20,400) units. The company has taken a loan for the investment costs with an annual effective borrowing rate of 15% to be paid in monthly installments of 50,000TL in 5 years. The cost of raw materials to be used in production is 20TL/unit and its annual escalation is 18%. Annual electricity costs are 50,000TL and its annual escalation is 23%. Maintenance costs will be incurred every two years, with an first cost of TL 100,000 and an increase of TL 20,000 every two years. Product sales price escalation is 25%. Since the expected profit rate is 31%, determine the minimum selling price by using the present worth method considering the cash flows for 10 years. (50 P)
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