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Koether Inc., located in Dunlap, Tennessee is considering two different makes of blow molding machines for one of its automotive products. The cost data for

Koether Inc., located in Dunlap, Tennessee is considering two different makes of blow molding machines for one of its automotive products. The cost data for the two alternatives are provided in table below. Using an MARR =12%, conduct an incremental analysis to see which Machine, if any, should be selected.

Machine X

Machine Y

Initial cost

$160K

$285K

Annual operating cost

45K

45K

Benefits /Year

90K

105K

Salvage value

20K

40K

Life

10 Years

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