Considering options for purchasing material handling

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Fox company has defined a new manufacturing process and is considering options for purchasing material handling equipment from two companies: company X has given a quote od $100,000 for equipment that will last 5 years and will have a $25,000 salvage value. each year the equipment will yield $60,000 in benefits, but will incur $30,000 in costs. company Y has equipment that will last 5 years, generate $50,000 in annual benefits and incur $25,000 in annual cost. it will have no salvage value. Determine the maximum initial price (cost) that Egal company should pay for company Y's equipment such that the material handling equipment firm Companies X and Y are enconomically equivalebt. MARR = 10%.

Reference no: EM131073829

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