Which machine should be selected on basis of future worth

Reference no: EM131763393

Question: Two machines can be used for manufacturing aluminum cans. Machine 'A' will have a first cost of $150,000, an operating cost of $16,000 per year, and a salvage value of $28,000 after its 2-year life. Machine 'B' will have a first cost of $350,000, an operating cost of $9,000 per year, and a $70,000 salvage value after its 6-year life. Machine 'B' will also require updating at the end of year 4 at a cost of $30,000

Which machine should be selected on the basis of a future worth analysis at an interest rate of 11% per year? (show your calculations of the future worth for both options)

Reference no: EM131763393

Questions Cloud

Reject the project based on the calculation results : If you were the manager of the firm, will you accept or reject the project based on the calculation results above?

Discuss what is the amount of its retained earnings : What is the amount of its Retained Earnings at the end of the year

Companies have to penetrate these markets : What strategic options do these companies have to penetrate these markets?

Describe the possible effects of these challenges : Describe potential challenges that may be encountered while working in the field of corrections.Describe strategies for working through these challenges.

Which machine should be selected on basis of future worth : Which machine should be selected on the basis of a future worth analysis at an interest rate of 11% per year? (show your calculations of the future worth.

Determine the effective annual percentage interest rate : Determine the effective annual percentage interest rate on these loans. Round your answer to two decimal places.

Estimate the cost equation using the high-low method : Estimate the cost equation using the High-Low Method, and draw this line on your graph

Foggy futures weather forecasting company : The earnings of Foggy Futures Weather Forecasting Company are expected to grow at an annual rate of 14% over the next 5 years and then slow.

How many beanie babies toys were actually worked : Ty Inc. manufactures Beanie Babies using a Weighted Average process costing system. The manufacturing occurs in two stages: Department 1 sews fabric pieces.

User Account

All Pages