The following annual costs are associated with three new extruder machines being

Question

The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant:
Data X X-TRUD SUPR-X Useful Life, Years 7 13 17 First Cost $2,420,000 $2,680,000 $2,400,000 Salvage Value $114,000 $92,000 $125,000 Annual Benefit $158,000 $510,000 $716,000 M&O $70,000 $80,000 $66,000 M&O Gradient $13,500 $17,000 $13,000
The company's interest rate (MARR) is 7%. Which extruder should the Styrofoam company choose?
Use Annual Cash Flow Analysis and provide the right reason. Answer Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $147,615 higher than X and $77,088 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $709,615 higher than X and $297,088 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 Data X X-TRUD SUPR-X Useful Life, Years 7 13 17 First Cost $2,420,000 $2,680,000 $2,400,000 Salvage Value $114,000 $92,000 $125,000 Annual Benefit $158,000 $510,000 $716,000 M&O $70,000 $80,000 $66,000 M&O Gradient $13,500 $17,000 $13,000
The company's interest rate (MARR) is 7%. Which extruder should the Styrofoam company choose?
Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $147,615 higher than X and $77,088 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $709,615 higher than X and $297,088 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 Data X X-TRUD SUPR-X Useful Life, Years 7 13 17 First Cost $2,420,000 $2,680,000 $2,400,000 Salvage Value $114,000 $92,000 $125,000 Annual Benefit $158,000 $510,000 $716,000 M&O $70,000 $80,000 $66,000 M&O Gradient $13,500 $17,000 $13,000

Explanation / Answer

Choosing SUPR-X will maximize the EUAB-EAUC; its value is $147,615 higher than X and $77,088 higher than X-TRUD.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.