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A construction company is offered two different construction machines as X and Y models. Machine X has an initial cost of $55,000 and an annual
A construction company is offered two different construction machines as X and Y models. Machine X has an initial cost of $55,000 and an annual cost of $27,100. The useful life of the machine is 8 years; The scrap value at the end of this period is $10,000. Machine Y has an initial cost of $95,000 and annual costs of $22,500 and a useful life of 8 years. The salvage value at the end of its useful life is $30,000. If the expected minimum profitability is 10%, which machine would the construction company prefer
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