Question
The company makes tasty seafood dumplings and is considering two alternatives to automate its production process. The data is included below: A B Initial COst
The company makes tasty seafood dumplings and is considering two alternatives to automate its production process. The data is included below:
| A | B | |
| Initial COst | $42.500 | $70,000 |
| Annual costs O&M | $6,000 | $4,000 |
| Annual savings | $18,500 | $20,000 |
| Residual value | $12,000 | $25,000 |
| Useful life | 3 year | 6 year |
Recommend the alternative that you consider the most attractive for this company. Do the analysis using the net present value and annual equivalent value techniques. Show the details of your analysis.
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Managerial Accounting
Authors: Ronald W Hilton
7th Edition
0073022853, 978-0073022857
