Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Econometric Analysis

Authors: William H. Greene

5th Edition

130661899, 978-0130661890

More Books

Students also viewed these Economics questions

Question

To find integral of sin(logx) .

Answered: 1 week ago

Question

What is Centrifugation?

Answered: 1 week ago

Question

To find integral of ?a 2 - x 2

Answered: 1 week ago

Question

To find integral of e 3x sin4x

Answered: 1 week ago