In: Finance
Chocolate Goodies is looking for a new cookie cutter machine. The following are the alternatives machines they have been offered:
Machines | A | B | C |
Cost | $18,000 | $25,000 | $15,000 |
Annual Net Savings | $1,055 | $2,125 | $1,020 |
IRR | 7% | 9% | 8% |
Each machine has 25 years of useful life and no salvage value. The business has been using 8% as their MARR. Which machine should be chosen?