New widget machines for which annual cost data

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The ABC Co. is considering purchasing a new widget machine. The company interest rate (MARR) is 12%. Which (if either) of the two new widget machines for which annual cost data are available should ABC purchase? Use incremental rate of return analysis. The following annual cost data are available for the two possible alternatives: Data WIDGETS-R-US W-W-WIDGETS Useful Life, Years 6 6 First Cost $2,780,000 $2,250,000 Salvage Value $85,000 $70,000 Annual Benefit $870,000 $675,000 Annual M&O cost $82,000 $60,000 M&O Gradient $8,000 $10,000

Reference no: EM131167525

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