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.

Machine X Machine Y

First cost ($) 200,000 300,000

Annual operating cost ($) per year 10,000 20,000

Annual revenue ($) per year 80,000 100,000

Salvage value ($) 70,000 95,000

Life, years 3 6