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Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following
Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data:
| Machine A | Machine B |
Capital investment | $16,000 | $29,000 |
Life | 12 years | 8 years |
Terminal BV (and MV) | $5,000 | $1,500 |
Annual receipts | $145,000 | $186,000 |
Annual expenses | $140,000 | $166,000 |
Determine which is the better alternative, assuming repeatability and using SL depreciation, an income tax rate of 40%, and after-tax MARR of 9%.
Please Find Annual Worth, of Machine A and B as well
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