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Please dont ignore the additional cost (3000 after 3 yrs) and include it in your solution EXAMPLE A certain Toys Company is considering the following

Please dont ignore the additional cost (3000 after 3 yrs) and include it in your solutionimage text in transcribed

EXAMPLE A certain Toys Company is considering the following two options: MARR = 15% Option 1: Manufacture the toys: Purchasing two new machines (A and B) First Cost (9) Salvage Value (S) Life (years) O&M (S) Additional Cost (S) Machine (A) 18000 2000 6 6000 3000 after 3 years Machine (B) 12000 500 4 5000 0 The above option (manufacture 2 machines) requires hiring four workers at $2.5/hr each (8 hrs day period). The machines produce 1000 toys/day. Option 2: Buying the toys at $ 0.5 per toy (a) (b) How many toys should be produced to justify buying parts? If production is 75000 toys/year, which alternative would you choose

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