Question

The manager in a canned food processing plant is trying to decide between two labeling machines....

The manager in a canned food processing plant is trying to decide between two labeling machines.

Assume an interest rate of 6%. Use annual cash flow analysis to determine which machine should be chosen

Machine A Machine B
First cost $15,000 $25,000
Maintenance and operating costs 1,600 400
Annual benefit 8,000 13,000
Salvage value 3,000 6,000
Useful life, in years 6 10
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Answer #1

Because annual worth of B is higher, this should be selected.

Therefore 'B' is the answer to this question

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