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 |
Homework Answers
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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