What will be the annual operating costs

Reference no: EM13179735

The Crockett Land Winery must replace its present grape-pressing equipment. The two alternatives are the Quik-Skwish and the Stomp-Master. The annual operating costs increase by 12% each year as the machines age. If the interest rate is 9%, which press should be chosen?

                 Quick-Skwish Stomp-Master
First cost                  $350,000    $500,000
Annual operating costs 28,000 22,500
Salvage value              35,000 50,000
Useful life, in years           5 10

Reference no: EM13179735

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