Question
You are required to evaluate two systems. The cost of a used system is $75,000. Through a new system, labor hours can be decreased by
You are required to evaluate two systems. The cost of a used system is $75,000. Through a new system, labor hours can be decreased by 20% as compared to the used system. The cost of a new system is $150,000. Both systems have a useful life of five years. According to estimations, the market value of the used system will be $20,000 in five years, and the market value of the new system will be $50,000 in five years. The used system has to operate 8 hours per day for 20 days per month. If labor costs $40 per hour and the MARR is 1% per month, which system should be recommended?
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