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Data for two independent investment opportunities are shown below. Initial Cost Revenues (annual) Costs (annual) Scrap value Service Life Machine A $1,850,000 $850,000 $450,000 $95.000
Data for two independent investment opportunities are shown below. Initial Cost Revenues (annual) Costs (annual) Scrap value Service Life Machine A $1,850,000 $850,000 $450,000 $95.000 6 years Machine B $2,200,000 $1,150,000 $700.000 $220,000 12 years a. For a MARR of 7 percent, should either, both, or neither machine be purchased? Use the annual worth method. b. For a MARR of 7 percent, should either, both, or neither machine be purchased? Use the present worth method. c. What are the payback periods for these machines? Should either, both, or neither machine be purchased, based on the payback periods? The required payback period for investments of this type is 2 years. Click the icon to view the table of compound interest factors for discrete compounding periods when i = 7%. V should be chosen. a. The annual worth for Machine A is $. The annual worth for Machine B is $0. (Type an integer or decimal rounded to two decimal places as needed.)
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