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A manufacturing company needs to replace an obsolete assembly line and is considering two new lines offered by two competing suppliers: Initial Cost O&M Salvage
A manufacturing company needs to replace an obsolete assembly line and is considering two new lines offered by two competing suppliers: Initial Cost O&M Salvage value Life Line A $ 15 Million $ 400,000/Year $ 1 Million 7 Years Line B $ 25 Million $ 300,000/Year $2.5 Million 21 Years The Company's cost of capital is 10% 1) Compare the PW of the costs of the two alternatives 2) Calculate the EUAC of the two alternatives and confirm the conclusion you have reached for question 1 above 3) If you were the manager in charge of deciding which alternative to select, what additional data would you need
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