Compare the two machines and state basis of your compare

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Reference no: EM13146005

Two machines are being considered for purchase. The Sande 10 costs $36000 new and is estimated to last five years. The cost to replace the Sande 10 will increase by 4% each year. Annual operation and maintenance costs are $2400. It will have a trade-in (salvage) value of $3000. The Sande 20 costs $76000 to buy, but will last 10 years and will have a trade-in (salvage) value of $4000. The cost of operation and maintenance is $1400 per year. Compare the two machines and state the basis of your comparison. Include a cash flow diagram for each alternative. Assume all interest rates at 6% per year unless otherwise stated.

Reference no: EM13146005

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