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You are considering two types of machines for a manufacturing process. Machine A has a first cost of $75,200, and its salvage value at the
You are considering two types of machines for a manufacturing process. Machine A has a first cost of $75,200, and its salvage value at the end of six years of estimated service life is $21,000. The operating costs of this machine are estimated to be $6,800 per year. Extra income taxes are estimated at $2,400 per year. Machine B has a first cost of $44,000, and its salvage value at the end of six years' service is estimated to be negligible. The annual operating costs will be $11,500. Compare these two mutually exclusive alternatives by the present-worth method at i = 13%
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