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Question 2 (20 mark): The following costs are associated with two new peanut picker machines being considered for use: PIK-M-UP CARTER'S Life, Years 15 12
Question 2 (20 mark): The following costs are associated with two new peanut picker machines being considered for use: PIK-M-UP CARTER'S Life, Years 15 12 First Cost $480,000 $345,000 Salvage Value $63,000 $45,000 $75,000 for the first six $106,000 at the end of first year and then increases by years and $85,000 for the second 6 years (years 7 to 12) Benefit, Yearly $4,000 per year $15,500 at the end of first year and then will increase by M&O Costs, Yearly 2% per year 13,200 The company's MARR is 12%. The company decides to consider a study period of 10 years to compare the two alternatives using present worth analysis. The market value of machines at the end of year 10 are estimated as the book value obtained by the straight-line depreciation method. Which machine should be purchased
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