State which cutter should be purchased and why

Reference no: EM131945892

Question: Biz Wiz, Inc. must purchase a laser cutter to make turbine blades they just designed. They can purcahse a high power cutter that would allow them to cut thicker blades in the possible future or they can pick a lower power cutter that can only cut the deisgned blade thickness.However, they must choose the cutter that gives them the hgihest equivalent uniform annual owrth. (EUAW). The high power cutter cost $340,000 and will increase the annual profit $97,000. It will have a life of 6 years and will not be replaced. A low power cutter cost $240,000 but will only increase profit by $55,000 and last 12 years. The analysis period is 12 years and interest reate is 7%. State below the EUAQ of each cutter. Also state which cutter should be purchased and why.

Reference no: EM131945892

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