The following costs are associated with four tomato-peeling machines being consi
ID: 1185785 • Letter: T
Question
The following costs are associated with four tomato-peeling machines being considered
for use in a canning plant. If the canning company uses an interest rate of 12%, which is
the best alternative? Use NPW to make your decision.
Machine A B C D
First Cost
A: $52,000 B: $63,000 C: $67,000 D: $30,000
Operating Costs /yr $
A: 15,0000 B: $9,000 C: $12,000 D: $14,000
Annual Benefit
A: $38,000 B: $31,000 C: $37,000 D: $36,000
Salvage Value
A: $13,000 B: $19,000 C: $22,000 D: $15,000
Useful Life (yrs)
A: 4 B: 6 C: 12 D: 3
a) Draw the cash flow diagram for each option. Choose the least common multiple
for the planning horizon (project life).
b) Separate costs from benefits
Explanation / Answer
b)Project D Yields high profit in terms of NPW of $40140. c)No change in decision, after changing the intrest rate from 12% to 6% Project D yields high profit of $98679.4.. please rate the answer and send your mail id; so that i ll send the excel sheet contains solution in detail. Because unable to upload excel (or) picture
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