The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data X-TRUD SUPR-X Useful Life, Years 7 5 |13 First Cost $2,640,000 $2,580,000 $2,700,000 Salvage Value $102,000 $120,000 $78,000 Annual Benefit $329,000 $509,000 $677,000 M&O $59,000 $80,000 $54,000 M&O Gradient $13,000 $10,000 $17,000 The company's interest rate (MARR) is 21%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $96,154 higher than X and $204,047 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $449,154 higher than X and $398,047 higher than X-TRUD.

The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data X-TRUD SUPR-X Useful Life, Years 7 5 |13 First Cost $2,640,000 $2,580,000 $2,700,000 Salvage Value $102,000 $120,000 $78,000 Annual Benefit $329,000 $509,000 $677,000 M&O $59,000 $80,000 $54,000 M&O Gradient $13,000 $10,000 $17,000 The company's interest rate (MARR) is 21%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $96,154 higher than X and $204,047 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $449,154 higher than X and $398,047 higher than X-TRUD.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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