A machine that costs P$5,000$ will last $20$ years and have a scrap

value at that time of P$500.$ Repairs will average P$300$ a year.

operating expenses, including the wage of the operator, will be

P$400$ a month. A second machine will produce twice as many units

per year. It costs P$50,000$ and must be replaced at the end of

$25$ years at a cost of P$45,000.$ Repairs for this machine will

average P$250$ per year, and operating expenses will be P$500$ per

month. If money is worth $5\%$ effective, how much will be saved,

if any, each year by purchasing the more economical machine?

$*$ENGINEERING ECONOMY SUBJECT$*$