Integration into an upgraded manufacturing line.

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Reference no: EM13832464

An engineer must recommend one of two machines for integration into an upgraded manufacturing line. She obtains estimates from two salespeople. Salesman A gives her the estimates in future (then-current) dollars, while saleswoman B provides the estimates in today's (constant-value) dollars. The company has a MARR of a real 15% per year, and it expects inflation to be 5% per year. Use PW analysis to determine which machine the engineer should recommend.

Salesman A (future $) Saleswoman B (today's $)

-60,000 -95,000 first cost, $

-55,000 -35,000 AOC, $/year

10 10 life, years

Reference no: EM13832464

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