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2.- (20-minutes, 20 points).It is required to replace an existing batch evaporator: in a food manufacturing plant. There are two alternatives: 1 Alternative:1:The company can
2.- (20-minutes, 20 points).It is required to replace an existing batch evaporator: in a food manufacturing plant. There are two alternatives: 1 Alternative:1:The company can purchase a single-effect continuous evaporator.. for $ 150,000 with a service life of 10 years and zero salvage value. This: evaporator would reduce annuallabor, maintenance and steam.cost by $45,000,- but increase annual expenses.fortax and insurance by $10,000. All other expenses except depreciation would be unchanged. I 1 Alternative-2::Purchasing a continuous triple effect evaporator for $230,000 with: a service life of 10 years with zero salvage value. This evaporator-would-reduce current'annual labor, maintenance and steam.cost.by.$85,000, but increase the annual expenses-for-tax and insurance by $15,000. All other expenses except depreciation would be unchanged. I 1 The minimum acceptable return (mar) after-35%-income tax for the company.is: 20%. Straight line depreciation method is used. Determine which alternative. should be selected.(15:P)
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