Question

A firm is considering the purchase of new machine to increase the output of an existing production process. If each of these machine provided the same service over their useful lives and the MARR is 15% | | ALTERNATIVE A | ALTERNATIVE B | | :--- | :--- | :--- | | Initial Investment | $14,000 | $65,000 | | Annual Cost | $14,000 | $9,000 | | Market Value at the end of Useful Life | $8,000 | $13,000 | | Useful life | 5 years | 20 years | a) Which machine should be selected on the basis of repeatability assumption? AWA=$Blank 1 and AWB=$Blank 2 b) Using coterminated assumption with a 5-year study period (compute the market value of alt B), which machine is preferred? AWA=$Blank 3 and AWB=$Blank 4 , Imputed Market Value of B =$Blank 5 c) If perpetual service life is assumes, which of these alternative do you recommend? CCA=$Blank 6 and CCB=$Blank 7 Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to tw Cdecimal places (in percentage).

          A firm is considering the purchase of new machine to increase the output of an existing production process. If each of these machine provided the same service over their useful lives and the MARR is 15%

| | ALTERNATIVE A | ALTERNATIVE B |
| :--- | :--- | :--- |
| Initial Investment | $14,000 | $65,000 |
| Annual Cost | $14,000 | $9,000 |
| Market Value at the end of Useful Life | $8,000 | $13,000 |
| Useful life | 5 years | 20 years |

a) Which machine should be selected on the basis of repeatability assumption? AWA=$Blank 1 and AWB=$Blank 2
b) Using coterminated assumption with a 5-year study period (compute the market value of alt B), which machine is preferred? AWA=$Blank 3 and AWB=$Blank 4 , Imputed Market Value of B =$Blank 5
c) If perpetual service life is assumes, which of these alternative do you recommend? CCA=$Blank 6 and CCB=$Blank 7

Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to tw Cdecimal places (in percentage).

A firm is considering the purchase of new machine to increase the output of an existing production process. If each of these machine provided the same service over their useful lives and the MARR is 15%

| | ALTERNATIVE A | ALTERNATIVE B |
| :— | :— | :— |
| Initial Investment | 14,000 |65,000 |
| Annual Cost | 14,000 |9,000 |
| Market Value at the end of Useful Life | 8,000 |13,000 |
| Useful life | 5 years | 20 years |

a) Which machine should be selected on the basis of repeatability assumption? AWA=Blank 1 and AWB=Blank 2
b) Using coterminated assumption with a 5-year study period (compute the market value of alt B), which machine is preferred? AWA=Blank 3 and AWB=Blank 4 , Imputed Market Value of B =Blank 5
c) If perpetual service life is assumes, which of these alternative do you recommend? CCA=Blank 6 and CCB=Blank 7

Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to tw Cdecimal places (in percentage).

Added by Darell F.

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