What is the annual worth of each alternative

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Reference no: EM131966024

Question: DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $ 3,200 , an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $ 240 regardless of the number of gumdrops produced. MARR is 6%/year, and 30 million gumdrops ware produced each year.

What is the annual worth of each alternative?

Reference no: EM131966024

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