Question
In: Accounting
A company is considering buying an automatic machine for a certain process. The machine has an...
A company is considering buying an automatic machine for a
certain process. The machine has an initial cost of 23,000, a
residual value of 4,000 and a useful life of 10 years. The
production of this machine is 8 tons per hour. You need an operator
that makes $ 12.00 per hour. The annual cost of operation and
maintenance is 3,500
As a second alternative you can buy a small machine for 8,000
that has a residual value of 0 and a useful life of 5 years. This
requires three operators to earn $ 8.00 per hour per operator. Its
maintenance cost is $ 1500 per year. This produces 6 tons per hour.
MARR = 10%.
How many tons per year should be processed to justify buying
the most expensive? N is the number of tons processed per
year
Economical analysis for engineers
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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