A computerized wood lathe, costing 17,000, will be used to make ornamental parts for sale. Sales are estimated $28,000 per year with cost running 10,000 for the first year and increase by $1000 for the for year subsequently. The salvage value is $2000 at the end of 10 years.

2)If the MARR is 9% , determine the present worth of the investment?

B) Is this investment recommended? Justify?

Question 2

A Product can be manufactured with two different processes Q and R . Cost and revenue associated with each process areas are shown below. Determine which process based on the IRR analysis: MARR is 6%

Process Q: Initial cost: $26,000, Annual revenue =$4,100, Time life= 10

Process R: Initial cost: $44,000, Annual revenue =$6,200, Time life= 10