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Huck Long is the VP of production at Discraft Inc., manufacturer of freestyle, golf and ultimate discs. The R&D team has designed a new 174
Huck Long is the VP of production at Discraft Inc., manufacturer of freestyle, golf and ultimate discs. The R\&D team has designed a new 174 gram diver for disc golt. The driver is both more stable and longer. The secret to the disc is a new polymer. To mix the new polymer in large batches, Discratt needs a new mixerlagitator. Huck is considering two alternatives: Mixer A and Moxer B. Mixer A is expected to have a four (4) year life and Huck estimates that its NPV is $52,000. Mixer B is expected to have a five (5) year life and Huck estimates that its NPV is $63,000. Discraft's cost of capital is 10%. Use the equivalent annual annuity technique to compare the two alternatives, What is the annual annuity amount of each, and which should Huck choose? What is the EAA for Mocer A? (Round your answer to two decimal places.) What is the EAA for Mixer B? (Round your answer to two decimal places.)
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