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2. (Submit for Grading) Two machines are being considered for a Widget fabrication project. The costs for the machines are given below, assuming that widgets
2. (Submit for Grading) Two machines are being considered for a Widget fabrication project. The costs for the machines are given below, assuming that widgets will be fabricated for a 7-year period. Item Machine A Machine B Capital cost $50,000 $653000 0&1\" 36,000 $3,000 Salvage Value None $4,000 Use an equal comparison cost analysis to determine which machine should be purchased. Assume that the time value of money is 12% (annual interest rate). 21) Draw and label the cash ow diagram for Machine A. b) Compute the future worth ofMachine A for the capital costs (Fl). the operation and maintenance costs (F2), and the salvage value (F3). c) Draw and label the cash ow diagram for Machine B. d) Compute the future worth ofMachine B for the capital costs (Fl ). the operation and maintenance costs (F2), and the salvage value (F3). e) Do an equal comparison cost analysis of the two options using their future worth, and determine the best option
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