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Question 1: If you were assigned to evaluate two following options. The details of cash flow of the two options are shown below: Option-1, the

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Question 1: If you were assigned to evaluate two following options. The details of cash flow of the two options are shown below: Option-1, the initial cost is $25000, annual operating cost is $1600, cost of renovation is $2500 at the end of every 17 years, one time upgrading cost is $3200 at the end of 22 year. Option -2, the Initial cost is $33000, annual operating cost is $1200, cost of renovation is $3500 at the end of every 20 years. A. Compare the options on the basis of capitalized cost and find out the economical option, if the rate of interest is 10% per year. Question 2: A manufacturing company has two options to buy a machine for improving its production volume. The cash flow details of the two options (machine-1 or machine-2) are given as follows; Machine- 1: the initial purchase cost = $5,660,000, salvage value = $1,250,000, useful life = 12 years. The operating cost for Machine-1 is $13 per item produced. Machine-1 can produce 54 items in one hour. Machine-2: the initial purchase cost = $6,780,000, salvage value = $1,410,000, useful life - 12 years, and the operating cost for Machine-2 is $10 per item produced. Machine-2 can produce 62 items in one hour. A. If the company MARR is 10.5% per year, how many hours, the Machines have to operate per year for the equivalent uniform annual worth of cash flows of both machines to be equal? B. Develop and show the graphical presentation of your analysis to the two options and comment on the results of your analysis

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