Invest in one of two different automated clicker cutters

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Fantastic Footwear can invest in one of two different automated clicker cutters, A and B. The first cutter, A, has a $ 100 000 first cost. Another similar cutter with many extra features, B, has a $ 400 000 first cost. Cutter A will save $ 50 000 per year over the cutter now in use. Cutter B will save $ 150 000 per year. Each clicker cutter will last five years. If the MARR is 10 percent, which alternative is better? Use an IRR comparison.

Reference no: EM131005453

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