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In: Mechanical Engineering

I am planning on purchasing a new Tractor, There are two machine choices, Tractor A and...

I am planning on purchasing a new Tractor, There are two machine choices, Tractor A and Tractor B. Tractor A will cost $175,000 and Tractor B will cost $275,000. Due to various uncertainties in manufacturing operations, the useful life of each machine is unknown, but the following probability estimates have been made.

Useful life (years)

Probability

Machine A

Machine B

15

0.15

0.25

25

0.25

0.45

35

0.45

0.20

45

0.15

0.10

A. Determine the expected life of each machine.

B. Based on the ratio of purchase cost to expected life, which machine would you recommend?

Solutions

Expert Solution

samet mamat answered 2 years ago
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