Please do fast ASAP fast Data for two machines P and Q are as shown below. At whatMARR will both machines be equally attractive for installation?MachineMachineInitial cost$125,000 $275,000Life in years4Inflation per year (for all costs)2.00%Benefit increase per year4.50%MARR per year compounded yearly12.00%Project life in years12Firstyearestimated costs$33,750$63,250First year estimated benefits$65,000$112,750Salvage value of machine (% ofinitial cost)12.00%8.00%

For both machines being equally attractive we find the MARR of Q such that the present worth of both…

Answered: Data for two machines P and Q are as…

Data for two machines P and Q are as shown below. At what MARR will both machines be equally attractive for installation? Machine Q Machine Initial cost $125.000 $275.000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.

Question

Please do fast ASAP fast

Data for two machines P and Q are as shown below. At what
MARR will both machines be equally attractive for installation?
Machine
Machine
Initial cost
$125,000 $275,000
Life in years
4
Inflation per year (for all costs)
2.00%
Benefit increase per year
4.50%
MARR per year compounded yearly
12.00%
Project life in years
12
First
year
estimated costs
$33,750
$63,250
First year estimated benefits
$65,000
$112,750
Salvage value of machine (% of
initial cost)
12.00%
8.00%

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