Capitalized cost to compare the machines

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Reference no: EM131806521

A job can be done with Machine A that costs $12,500 and has annual end-of-year maintenance costs of $5000; its salvage value after 3 years is $2000. Or the job can be done with Machine B, which costs $15,000 and has end-of-year maintenance costs of $4000 and a salvage value of $1500 at the end of 4 years. These investments can be repeated in the future, and your work is expected to continue indefi- nitely. Use present worth, annual worth, and capitalized cost to compare the machines. The interest rate is 5%/year. Contributed by D. P. Loucks, Cornell University.

Reference no: EM131806521

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