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DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $5,800, an estimated life of 10
DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $5,800, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $260 regardless of the number of gumdrops produced. MARR is 6%/ year, and 30 million gumdrops ware produced each year. a. What is the annual worth of each alternative? Machine 7745AW=$ Machine A37Y AW =$ Round your answer to the nearest whole dollar. Tolerance is 1. b. What is the decision rule for determining the preferred machine based on annual worth ranking? c. Which machine should be recommended? Click here to access the TVM Factor Table Calculator DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $5,800, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $260 regardless of the number of gumdrops produced. MARR is 6%/ year, and 30 million gumdrops ware produced each year. a. What is the annual worth of each alternative? Machine 7745AW=$ Machine A37Y AW =$ Round your answer to the nearest whole dollar. Tolerance is 1. b. What is the decision rule for determining the preferred machine based on annual worth ranking? c. Which machine should be recommended? Click here to access the TVM Factor Table Calculator
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