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For a MARR of 12%, which of the two mutually exclusive machines should be selected? Machine A Machine B Initial cost $450,000 $476,000 Life in
For a MARR of 12%, which of the two mutually exclusive machines should be selected?
Machine A | Machine B | |
Initial cost | $450,000 | $476,000 |
Life in years | 6 | 6 |
Salvage after life | 12% | 18% |
Benefits per year | $84,000 | $94,000 |
Costs per year | $12,900 | $26,800 |
Inflation | 3% | |
Increase in benefits | 7% |
Machine A. | ||
Machine B. | ||
Either machine will be fine. | ||
None of the machine are good enough. Both should be rejected. |
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