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An industrial company plans to increase its production capacity. There are two alternatives, i.e. two machines (machine A or machine B) the company could purchase.
An industrial company plans to increase its production capacity. There are two alternatives, i.e. two machines (machine A or machine B) the company could purchase. Both machines have a life span of 10 years. Both machines can produce 15000 units per year. The company plans with a capacity utilization rate of 80%. The selling price per unit is 36,80 for machine A and 40.50 for machine B (due to better quality). The company wants to achieve a return on investment of at least 9% p.a. Further data: Required: Cost Comparison Method (CCM) Profit Comparison Method (PVM) Return on Investment Method (RIM) Amortisation Comparison Method (ACM)
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