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Explain purchase a new machine

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A company uses a milling machine that operates with crushing spheres has a capacity of 50 tons per hour and has an operation cost of P6000 per 500 kg and a wear rate of .05 kg per 500 kg of ground cement. They are offered another machine of the same capacity using high chrome steel crushing spheres with an operation cost of P50,000 per 1000 kg and a rate of wear equivalent to .02 kg per 1000 kg of ground cement. Assuming all other factors similar, should the company purchase a new machine or not? Show complete solution (1 ton = 1000 kg)

Reference no: EM133228050

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