Machine X has a first cost of $70,000 and an operating cost of $21,000 in year...

Machine X has a first cost of $70,000 and an operating cost of $21,000 in year 1, increasing by $500 per year through year 5 with a salvage value of $13,000. Machine Y has a first cost of $62,000 and an operating cost of $21,000 in year 1, increasing by 3% per year through year 10 with a salvage value of $2000. If the interest rate is i =18% per year, evaluate which machine must you choose on the basis of:( with the steps)

(a) the present worth analysis,

(b) the conventional B/C analysis

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Expert Solution

Choose Machine Y

If there is any doubt please ask in comments

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Rahul Sunny answered 1 year ago

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