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The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: X-TRUD Data Useful Life,
The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: X-TRUD Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 13 $2,070,000 $119,000 $89,000 $56,000 $13,000 5 $2,930,000 $87,000 $534,000 $80,000 $11,500 SUPR-X 11 $2,790,000 $108,000 $610,000 $50,000 $15,000 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-108,570 higher than X and $284,590 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $418,430 higher than X and $390,590 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1
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To determine which extruder the Styrofoam company should choose we need to calculate the equivalent uniform annual cost EUAC for each option and compa...Get Instant Access to Expert-Tailored Solutions
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