4) Machine A costs $35,000, lasts 3 years and has a salvage value of $7,500. Machine...

4) Machine A costs $35,000, lasts 3 years and has a salvage value of $7,500. Machine B costs $25,000, lasts 2 years and has a salvage value of $3,500. The machines can be purchased at the same price with the same salvage value in the future, and are needed for a 6 year project. Which machine would you purchase and why? Provide justification using an Annualized Equivalent Cost analysis. Interest is 10% annual rate, compounded annually.

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Expert Solution

Rahul Sunny answered 2 years ago

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