Question
You want to purchase one of the following milling machines. Machine A Machine B Initial Cost $20,000 $30,000 Life 10 years 10 years Salvage Value
You want to purchase one of the following milling machines.
|
| Machine A | Machine B |
| Initial Cost | $20,000 | $30,000 |
| Life | 10 years | 10 years |
| Salvage Value | $2000 | $500 |
| Annual receipts | $9000 | $12,000 |
| Annual Disbursements | $3500 | $4500 |
Consider the two machines above, what MARR is needed to make the two alternatives equal?
14%
17%
22%
25%
Show work
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I Love My Awesome Auditor
Authors: Lovely Hearts Publishing
1st Edition
1794298169, 978-1794298163
