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Three alternatives Machines have the following cost data associated with them. Machine Z Data Machine X Machine Y Useful Life, Years 10 10 10 $1,325,000
Three alternatives Machines have the following cost data associated with them. Machine Z Data Machine X Machine Y Useful Life, Years 10 10 10 $1,325,000 $1,980,000 $1,650,000 First Cost $265,000 $589,000 $435,000 Annual Benefit $95,000 $97,000 $91,000 Annual M&O Costs Annual additional M&O $2,300 $1,980 $2,100 cost in Gradient Salvage Value $205,000 $178,000 $145,000 Loan Payment $187,971 $150,946 $225,565 The loan payments are calculated using an interest rate of 10%, a life equal to the life of the machine, and a down payment of 30%. Use a MARR of 12% and determine which machine, if any, should be purchased. Use incremental analysis
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