EconomicsSU18 Help Save ExitSu You have two machines under

Economics-SU18 Help Save & ExitSu You have two machines under consideration for an improved automated wrapping process for Sn detailed below. Determine the difference in their Aws and which one should be selected at 14% per year. ickers Fun Size candy bars as achine $35,000 $-7000 $7,000 3 years $-65,000 $-12,000 $24,000 6 years nnual Cost per Year alvage Value Machine (Click to select) is selected for an improved automated wrapping process. KaRrev9 of 10 Next > now? Assume the account earns interest at 10% ears from now find the present value... .See answer per year. The amount to be depositedi 0

Solution

MachineC MachineD Annual cost -7000 -12000 Annuity factor for 14% 2.3216 3.8887 Present value of Cost -16251 -46664 Add: Initial Inv estment -35000 -65000 Total Present value of cost -51251 -111664 Less: Present value of salvage 4725 10934 Net present worth -46526 -100730 Divide: Annuity factor 2.3216 3.8887 Annual Worth -20040.6 -25903.3 Difference in Annual worth: 25903-20040= -5863 Machine C shall be selected