Two alternative machines will produce the same product, but one is capable of hi
ID: 1108183 • Letter: T
Question
Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 4141%, and an after-tax MARR of 99%.
Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 40%, and an after-tax MARR of 12% Capital investment Life Terminal BV (and MV) Annual receipts Annual expenses Machine A $19,000 11 years 4,500 $157,000 $142,000 Machine B $35,000 9 years $500 S181,000 S178,000 Click the icon to view the interest and annuitv table for discrete com Doundina when the MARR is 12% Der vear Calculate the AW value for the Machine A. AWA(12%- (Round to the nearest dollar.)Explanation / Answer
Here, the net annual receipts = 157,000 - 142,000 = $15,000
AWA(12%) = -19,000(A/P, 12%, 11) + 15,000 + 4,500(A/F, 12%, 11)
= -19,000(0.1684) + 15,000 + 4,500(0.0484)
= -3199.6 + 15,000 + 217.8
= $12,018