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A company is considering two different makes of a blow molding machine for one of its automotive products.The cost data for the two alternatives are
A company is considering two different makes of a blow molding machine for one of its automotive products.The cost data for the two alternatives are provided in table below. MARR=12%.Which machine would you recommend based on an IRR estimates for the two alternatives?
\begin{tabular}{|l|l|l|} \hline & Machine X & Machine Y \\ \hline Initial cost & $150K & $275K \\ \hline Annual operating cost & 55K & 60K \\ \hline Benefits /Year & 100K & 120K \\ \hline Salvage value & 20K & 40K \\ \hline Life & \multicolumn{2}{|c|}{10 Years } \\ \hline \end{tabular}Step by Step Solution
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