Two machines are being considered for improving process

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Two machines are being considered for improving a process. Machine A has a first costs of $300,000 and annual maintenance and operating costs (M&O) of $100,000 and it will result in costs reductions of 180,000 per year. Machine B has a first costs of $400,000 and annual maintenance and operating costs (M&O) of $200,000 and it will result in costs reductions of $300,000 per year Use a six-year study period and assume both machines A or B have no salvages. Determine which Machine should be selected on the basis of rate of return if the MARR is 10%per year compounded annually.

Reference no: EM131162925

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