Upgrade of biodiesel production

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Two flash vaporizer machines are considered for the upgrade of biodiesel production.

Information about the two machines is given below. MARR is 10% per year.

Machine A Machine B

Capital Investment $100 $120

Annual Revenue $50 $70

Useful Life (years) 3 2

Salvage value at the end of useful life $0 $10

The study period is 6 years. What assumption should be used? And, which machine should be selected based on the AW method ? Calculate down to at least two decimals at each step.

Reference no: EM131405438

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