Mr. John is considering two machines to purchase for his company. Machine X will

Question

Mr. John is considering two machines to purchase for his company. Machine X will have a first cost of $80,000, an annual maintenance and operation cost of                    $30,000 and a $ 40,000 salvage value. Machine Y will have a first cost of $97,000, an annual maintenance and operation cost of $27,000 and a $50,000 salvage                    value. Which should be selected on the basis of a future worth comparison at an interest rate of 15% per year?                                      Use a 3 year study period. (Im giving full points for this question)                     Use a 3 year study period. (Im giving full points for this question)

Explanation / Answer

machine x for three years
machine y for <6 years

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