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Two numerically controlled drill presses are being considered by the production department of a major corporation; one must be selected. Both machines meet the quality
Two numerically controlled drill presses are being considered by the production department of a major corporation; one must be selected. Both machines meet the quality and safety standards of the firm. Comparative data are as follows: Drill Press X Drill Press Y Initial Investment, $ 18,000 38,000 Estimated Life 6 yrs Salvage Value, $ 6,000 8,000 Annual Savings, $ 22,000 25,000 Annual Operating cost, $ 11,500 8,000 Annual Maint. Cost, $ 3,500 6,000 3 yrs MARR = 10 % a). Determine which alternative should be selected based on the present worth method. Give a PW values based on which you are making a selection. b). Determine which alternative should be selected based on payback period. Give Payback period for each alternative. If the answers in part a and b differ, explain why this is the case
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