The company is considering buying a new machine for their production line and have two choices of suppliers, Good Machines Inc and Simple Machines Inc. Their proposals are as follows: Expected life First cost Maintenance Labour Other costs Salvage value Good Machines Inc 7 years $225,000 $15,000/year + $0.06/unit $1.75/unit $6,800/year + 0.65/unit $7500 Simple Machines Inc 10 years $355,000 $30,000/year + $0.02/unit $0.75/unit $15,000/year + $0.75/unit $25,000 Management thinks they will sell about 30,000 widgets per year if the market is stable. If the markets become unsettled sales may be as high as 200,000 units per year, the company uses a MARR of 18% for equipment projects. a) Who is the preferred supplier if sales are 30,000 widgets per year? Use an annual worth comparison b) Who is the preferred supplier if sales are 200,000 units per year. Use an annual worth comparison c) How sensitive is the choice of supplier to sales level? Experiment with at least 3 other sales levels between 30,000 and 200,000 units per year. At what sales level will the cost of the two bids be equal. The company is considering buying a new machine for their production line and have two choices of suppliers, Good Machines Inc and Simple Machines Inc. Their proposals are as follows: Expected life First cost Maintenance Labour Other costs Salvage value Good Machines Inc 7 years $225,000 $15,000/year + $0.06/unit $1.75/unit $6,800/year + 0.65/unit $7500 Simple Machines Inc 10 years $355,000 $30,000/year + $0.02/unit $0.75/unit $15,000/year + $0.75/unit $25,000 Management thinks they will sell about 30,000 widgets per year if the market is stable. If the markets become unsettled sales may be as high as 200,000 units per year, the company uses a MARR of 18% for equipment projects. a) Who is the preferred supplier if sales are 30,000 widgets per year? Use an annual worth comparison b) Who is the preferred supplier if sales are 200,000 units per year. Use an annual worth comparison c) How sensitive is the choice of supplier to sales level? Experiment with at least 3 other sales levels between 30,000 and 200,000 units per year. At what sales level will the cost of the two bids be equal