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You are asked to select the best purchase option: there are two machines. They only give you data about costs, because sales will be exactly
You are asked to select the best purchase option: there are two machines. They only give you data about costs, because sales will be exactly the same for both alternatives. Therefore, there is than to select the Equipment that generates the lowest costs! The MARR is 12% nominal annual, compounded annually for both machines. a) Use the truncated method and make a recommendation. b) Use the AEC method and make a recommendation
Machine A | Machine B | |
Initial Investment | $62,000 | $77,000 |
Annual Net Cash Flows | $15,000 | $21,000 |
Salvage Value | $8,000 | $10,000 |
Useful life | 4 years | 6 years |
SOLVE ONLY IN EXCEL AND SHOW THE FORMULAS FOR EACH CELL PLEASE
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