Golf International Division designs and manufactures small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. (a) Compare the annual worth of the two systems at MARR = 10% per year. Select the better system. Construct the cash flow diagram. %3D (b) Determine the salvage value for the T System that will make the company indifferent between the two systems.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Golf International Division designs and manufactures
small engines for golf turf maintenance equipment. A
robotics-based testing system with support equipment
will ensure that their new signature guarantee program
entitled "Always Insta-Start" does indeed work for every
engine produced.
(a) Compare the annual worth of the two systems at
MARR = 10% per year. Select the better system.
Construct the cash flow diagram.
(b) Determine the salvage value for the T System that
will make the company indifferent between the two
systems.
Transcribed Image Text:Golf International Division designs and manufactures small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. (a) Compare the annual worth of the two systems at MARR = 10% per year. Select the better system. Construct the cash flow diagram. (b) Determine the salvage value for the T System that will make the company indifferent between the two systems.
B System
T System
Equipment first cost, $
-1,500,000
-2,250,000
AOC, $ per year
-700,000
-600,000
Salvage Value
Estimated life, years
100,000
50,000
10
10
Transcribed Image Text:B System T System Equipment first cost, $ -1,500,000 -2,250,000 AOC, $ per year -700,000 -600,000 Salvage Value Estimated life, years 100,000 50,000 10 10
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