Solution-Which machine if any should the company select at

Which machine if any should the company select at a marr

Reference no: EM13882051

Only one of four different machines can be purchased for Glass Act Products. An engineer performed the following analysis to select the best machine, all of which have a 10-year life. Which machine, if any, should the company select at a MARR of 22% per year?

	1	2	3	4
Initial cost, $	-44,000	-60,000	-72,000	-98,000
Annual cost, $ per year	-70,000	-64,000	-61,000	-58,000
Annual savings,	+80,000	+80,000	+80,000	+82,000
$ per year
Overall ROR, %	18.6	23.4	23.1	20.8
Machines compared	2 to 1	3 to 2	4 to 3
Incremental	-16,000	-12,000	-26,000
investment, $
Incremental cash fl ow,	+6,000	+3,000	+5,000
$ per year
ROR on increment, %	35.7	21.4	14.1

Reference no: EM13882051

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Which machine if any should the company select at a marr

Reference no: EM13882051

Reference no: EM13882051

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