3. A company is going to buy a new machine for manufacturing its product. Four different machines are available. Cost, operating and other expenses are as follows: A B C First cost 52,000 49,600 30,000 24,000 Power per year 1,300 1,360 2,400 2,020 Labor per year 11,600 9,320 4,200 2,000 Maintenance per year 2,800 1,900 1,300 700 Taxes and insurance 3% 3% 3% 3% Life, years 5 5 5 Money is worth 15 % before taxe the company. Which machine should be chosen? Use Rate of return on Additional Investment and Present worth method.

3. A company is going to buy a new machine for manufacturing its product. Four different machines are available. Cost, operating and other expenses are as follows: A B C First cost 52,000 49,600 30,000 24,000 Power per year 1,300 1,360 2,400 2,020 Labor per year 11,600 9,320 4,200 2,000 Maintenance per year 2,800 1,900 1,300 700 Taxes and insurance 3% 3% 3% 3% Life, years 5 5 5 Money is worth 15 % before taxe the company. Which machine should be chosen? Use Rate of return on Additional Investment and Present worth method.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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