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A company would like to buy one of the machines that have the following costs and revenues. Using a MARR of 10% per year, determine
A company would like to buy one of the machines that have the following costs and revenues. Using a MARR of 10% per year, determine which alternative should be selected on the basis of (a) present worth analysis under repeatability assumption, (b) future worth analysis under coterminated assumption, (c) annual worth analysis for one life cycle. (d) (incremental) internal rate of return analysis First cost ($) Annual operating cost ($) per year Annual revenue (S) per year Salvage value (S) Life, years Machine X 200,000 10,000 80,000 70,000 3 Machine Y 300,000 20,000 100,000 95,000 6 Machine Z 250,000 15,000 90,000 80,000 4
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