Widget Example 1 (Revenue Project, Unequal Lives)

Widget Example 1 (Revenue Project, Unequal Lives) -...

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Widget Example 1 (Revenue Project, Unequal Lives) ACME Corporation is considering making widgets to diversify their product line. They are comparing three widget-making machines whose costs and capacities are shown below: Item A B C Initial Cost $2,000,000 $2,300,000
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Unformatted text preview: $1,750,000 Salvage Value $200,000 $250,000 $150,000 Service Life 12 yrs 15 yrs 10 yrs O&M Cost $100,000/yr $80,000/yr $60,000/yr Production 4400/yr 4400/yr 4000/yr Assuming a profit of $150 per widget and a 15% MARR, which machine (if any) should they buy?...
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