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Acme Plastics Company must choose between two types of injection molding machines. Machine A costs $600,000, will last for five years, and will require $60,000
Acme Plastics Company must choose between two types of injection molding machines. Machine A costs $600,000, will last for five years, and will require $60,000 in maintenance each year. Machine B costs $750,000, will last for seven years, and will require $30,000 in maintenance each year. Maintenance costs for cranes A and B occur at the end of each year. The appropriate discount rate is 12 percent per year. Which machine should Acme purchase? Show your work below.
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