What is the annual worth of the two machines

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An engineer uses an economic analysis to determine which of the two machines to purchase. All the machines that are being considered are capable of performing the same task. Assume that the minimum attractive rate of return is 12% compounded monthly. What is the annual worth of the two machines? Which is the best investment


Machine X Machine Y
Initial cost 8,000 11,000
Estimated life 3 years 3 years
Salvage value 1,000 1,500
Monthly Maint. Cost 1,500 1,475
Monthly incomes 3,550 3,475

a. EAW x = 1,784.76, EAW y = 1,646.83, X is the best investment
b . EAW x = 669.51, EAW y = 807.53, Y is the best investment
c. EAW x = 1,784.76, EAW y = 1,646.83, Y is the best investment
d. EAW x = 807.53, EAW y = 669.51, X is the best investment

Reference no: EM13336677

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