Question
A dentist is deciding between two X-ray machines for his new office.Estimated costs for each machine are given below. Use an inflation-free MARR of 14%,
A dentist is deciding between two X-ray machines for his new office.Estimated costs for each machine are given below. Use an inflation-free MARR of 14%, an inflation rate of 6.5% per year, and a study period of 10 years.
a) What is the annual worth for Machine A?
b) What is the annual worth for Machine B?
c) Which machine should be recommended based on the annual worth method and an actual-dollar analysis?
| Machine | A | B |
| Installed cost | $50,000 | $52,000 |
| Annual maintenance cost | $1500 | $1200 |
| Market value at year 10 | $5750 | $6250 |
| Life, years | 10 | 10 |
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Finance For IT Decision Makers
Authors: Michael Blackstaff
3rd Edition
1780171226, 978-1780171227
