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Two machines arc being considered for a widget fabrication project. The costs for the machines are given below, assuming that widgets will be fabricated for
Two machines arc being considered for a widget fabrication project. The costs for the machines are given below, assuming that widgets will be fabricated for a 7-year period. Use an equal comparison cost analysis to determine which machine should be purchased. Assume that the time value of money is 12% (annual interest rate). a) Draw and label the cash flow diagram for Machine A. b) Compute the future worth of Machine A for the capital costs (F_1), the operation and maintenance costs (E_2), and the salvage value (F_3). c) Draw and label the cash flow diagram for Machine B. d) Compute the future worth of Machine B for the capital costs (F_1), the operation and maintenance costs (F_2), and the salvage value (F_3). e) Do an equal comparison cost analysis of the two options using their future worth, and determine the best option
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