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The machines shown below are under consideration for an improvement to an automated candy bar wrapping process. Machine C Machine D First cost, -50,000 -65,000
The machines shown below are under consideration for an improvement to an automated candy bar wrapping process. Machine C Machine D First cost, -50,000 -65,000 Annual cost, S/year -10,000 -15,000 Salvage value, $ 12,000 25,000 Life, years 4 7 (Source: Blank and Tarquin) Question 5 (10 points) Based on the data provided and using an interest rate of 8% per year, the correct equation to calculate the Capital Recovery "CR" of Machine Dis: (a) CR-=-65,000(P/A, 8%. 7) + 25,000(F/A, 8%, 7) (b) CR-=-65,000(A P. 8%, 7) + 25,000(A/F. 8%, 7) -15,000 (C) CR-=-65,000(AP, 8%, 7) +25,000(A F, 8%, 7) -15,000(AP, 8%, 7) (d) CR-=-65,000(AP, 8%, 7) - 25.000(A/F.8%, 7) Question 6 (10 points) Based on the data provided and using an interest rate of 8% per year, the Capital Recovery "CR"of Machine D is closest to: (All the alternatives presented below were calculated using compound interest factor tables including all decimal places) (a) CR- -S12,485 (b) CR-=-$9,683 (c) CR-=-$10,653 (d) CR-=-$24,683
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