Question
2. Two machines are being considered for purchase. The Sande 10 costs $36,000 new and is estimated to last five years. The cost to replace
2. Two machines are being considered for purchase. The Sande 10 costs $36,000 new and is estimated to last five years. The cost to replace the Sande 10 will increase by 4% each year. Annual operation and maintenance costs are $2,400. It will have a salvage value of $3,000. The Sande 20 costs $76,000 to buy and will last 10 years. It will have a salvage value of $4,000. The Sande 20 has an operation and maintenance cost of $1,400 per year. Compare the two machines over a 10 year period using a present worth analysis and a 6% per year interest unless otherwise stated. Which option is the best and why? For credit, you must show ALL your work
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