A new manufacturing facility will produce two? products, each of which requires a drilling operation during processing. Two alternative types of drilling machines ?(D1 and D2?) are being considered for purchase. One of these machines must be selected. For the same annual? demand, the annual production requirements? (machine hours) and the annual operating expenses? (per machine) are listed in the table below. Which machine should be selected if the MARR is 18% per year? Assumptions: The facility will operate 2,250 hours per year. Machine availability is 85% for Machine D1 and 80% for Machine D2. The yield of D1 is 85%, and the yeild of D2 is 75% Annual operating expenses are based on an assumed operation of Machine D2. The yield of D1 is 85% and the yield of D2 is 75%. Annual operating expenses are based on an assumed operation of 2,250

hours per? year, and workers are paid during any idle time of Machine D1 or Machine D2. Assume repeatability.

The total equivalent annual cost of owning a required number of machines D1 is $..........??

The total equivalent annual cost of owning a required number of machines D2 is $..........??

Product R-43 T-22 Capital investment Useful life Annual expenses Market value Machine D1 2,300 hours 1,200 hours 3,500 hours 17,500/ machine SIX years 5,000/machine 2,500/machine Machine D2 800 hours 1,600 hours 2,400 hours 22,500machine eight years 7,000/machine 4,000/machine