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Two new machines are being considered for the manufacture of a new line of semiconductors. The details of each machine are given in the table
Two new machines are being considered for the manufacture of a new line of semiconductors. The details of each machine are given in the table below.
The MARR is 10%. Comparison of the two options should be done using the LCM method.
A. Draw a cash flow diagram for each machine option.
B. Calculate the future worth for each machine option
C. Which machine would you recommend for purchase. Use your results from part (b) to justify your recommendation.
First Cost Operation Cost Salvage Value Lifespan Model A222 $350,000 $60,000/year $80,000 Model J363 $750,000 $25,000/year $100,000 4 years 2 years First Cost Operation Cost Salvage Value Lifespan Model A222 $350,000 $60,000/year $80,000 Model J363 $750,000 $25,000/year $100,000 4 years 2 yearsStep by Step Solution
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