Determine minimum equivalent uniform annual cost associated

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Reference no: EM132030375

XPTO Inc. has to buy a new machine. There are two options: Brand A: machine costs $10312 and is expected to have a scrap value of $8563 whenever it is retired. Operating and Maintenance costs are $1250 for the first year and expected to increase by $1397 thereafter. Brand B: machine costs $10429 and is expected to have a scrap value of $8936 whenever it is retired. Operating and Maintenance costs are $1409 for the first year and expected to increase by $1113 thereafter. If the MARR is 11%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine that offers the lowest EUAC. The service life of each machine is 4 years.

Reference no: EM132030375

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