Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis?

	Machine X	Machine Y
First cost, $	-200,000	-400,000
Annual operating cost, $ per year	-40,000	-50,000
Salvage value, $	80,000	90,000
Life, years	3	6

Solution:

PW _{Machine X} = $ (Use the right sign)

PW _{Machine Y} = $ (Use the right sign)

So, the best alternative is Machine