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Machine A costs $8500 and has annual operating cost of $500 with the salvage value of $500 at the end of 10 years of useful
Machine A costs $8500 and has annual operating cost of $500 with the salvage value of $500 at the end of 10 years of useful life. The annual revenue earned by machine A is $1500 Machine B costs $7000 and has annual operating cost of $550 with the salvage value of $300 at the end of 10 years of useful life. The annual revenue earned by machine B is $1800 Which machine will you choose based on (a)Present worth analysis (b) Annual worth analysis (C) Internal rate of return method at minimum attractive rate of return (MARR) of 10%. Also carry out sensitivity analysis using Present worth method as decision variable if the annual operating operating cost (a) for project A can vary between $400 to $600 (b) for project B can vary between $300 to $700. Also make the plot between net present worth and operating cost variation for A and B machine and comment on it. (Note: Here MARR is same as annual compounding interest rate) Machine A costs $8500 and has annual operating cost of $500 with the salvage value of $500 at the end of 10 years of useful life. The annual revenue earned by machine A is $1500 Machine B costs $7000 and has annual operating cost of $550 with the salvage value of $300 at the end of 10 years of useful life. The annual revenue earned by machine B is $1800 Which machine will you choose based on (a)Present worth analysis (b) Annual worth analysis (C) Internal rate of return method at minimum attractive rate of return (MARR) of 10%. Also carry out sensitivity analysis using Present worth method as decision variable if the annual operating operating cost (a) for project A can vary between $400 to $600 (b) for project B can vary between $300 to $700. Also make the plot between net present worth and operating cost variation for A and B machine and comment on it. (Note: Here MARR is same as annual compounding interest rate)
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