Question
The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data X X-TRUD SUPR-X Useful
The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant:
Data | X | X-TRUD | SUPR-X |
Useful Life, Years | 5 | 7 | 11 |
First Cost | $2,960,000 | $2,210,000 | $2,080,000 |
Salvage Value | $90,000 | $92,000 | $82,000 |
Annual Benefit | $259,000 | $663,000 | $739,000 |
M&O | $83,000 | $70,000 | $62,000 |
M&O Gradient | $15,500 | $16,000 | $13,000 |
The company's interest rate (MARR) is 15%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason.
Group of answer choices
Choosing SUPR-X will maximize the EUAB-EAUC; its value is $955,799 higher than X and $204,511 higher than X-TRUD.
Choosing SUPR-X will maximize the EUAB-EAUC; its value is $454,799 higher than X and $120,511 higher than X-TRUD.
Choosing SUPR-X is best because it has the highest Annual Benefit
Choosing SUPR-X is best because it has the lowest M&O cost in yr1
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