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After graduation, you just started working in a new company! Your boss asked you to choose a cutting machine to be used in the production
After graduation, you just started working in a new company! Your boss asked you to choose a cutting machine to be used in the production line. You have three options. Each option will work for the next 8 years (same useful life). MARR is 10%. Using an incremental analysis, which alternative should be chosen? The initial investment, annual revenue and annual expenses for each alternative are given in the below table. Machine A $8,000 Machine B $12,200 Machine C $17,800 Initial investment Annual Revenue Annual expenses Salvage value $3,500 $1,000 $0 $4,250 $1,200 $500 $6,500 $3,000 $1000 Decied about the technique that you want to use and complete the incremental tables to identify the best alternative. Show details of your work. Step 1: Alternative B Capital investment Net annual income Salvage value
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