Different industrial fryers using annual worth calculation

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Ben is choosing between two different industrial fryers using an annual worth calculation. Fryer 1 has a five- year service life and a first cost of $ 400 000. It will generate net year- end savings of $ 128 000 per year. Fryer 2 has an eight-year service life and a first cost of $ 600 000. It will generate net year- end savings of $ 135 000 per year. If the salvage value is estimated using declining- balance depreciation with a 20 percent depreciation rate and the MARR is 12 percent, which fryer should Ben buy?

Reference no: EM131090299

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