Question
can you give us a more detailed way of solving? A manufacturer is offered two machines A and B. A is priced at P 8,000
can you give us a more detailed way of solving?
A manufacturer is offered two machines A and B. A is priced at P 8,000 and maintenance costs are estimated at P 500 for the first year and an equal increment of P 100 from year 2 to year 5, and P 1,500 for the sixth year and an equal increment of P 500 from year 7 onwards. Machine B which has the same capacity is priced at P 6,000. The maintenance costs of the machine B are estimated at P 1,000 for the first year and an equal yearly increment of P 200 thereafter. If the money is worth 15% per year, which machine should be purchased? (Assume that the scrap value of each of the machines is negligible at any year.)
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