Three products will be manufactured in a new facility. They each require an iden

Question

Three products will be manufactured in a new facility. They each require an identical manufacturing operation, but different production times, on broaching machine. Two altemative types of broaching machines (M1 and 2) are baing considered for purchase One machine typa must be sclected For the same level of annual demand for the three products, aninual production requirements (machine hours) ad annual operating expenses (per machine) are listed on the right Product Macine M2 Machine M1 1,450 hr 1,750 hr 2,550 hr 5,850 hr $17,000 per machine five years $4,500 par machine ABC MNO STV 750 hr 1,150 hr 2,300 hr 4,200 hr $20000 par machine ight years $6500 per machine Capital investment Expacted life Annual axpenses Click the icon to view the additional information. Click the icon to vien' the GDS Reoovery Rates ( ) for the 5-year property class Click the icon to view, the interest and annuity table for discrete compounding when th MARR is 13% per year Calculate the AW value for Maching M AWM1(13% |(Round to the nearest hundreds.) Calculate the AW vakue for Machine M2 (13%ja s| | (Round to the nearest hundreds.) Based on tha AW values, salect Machine

Explanation / Answer

AW for maxhine M1=17000*13%/(1-1/1.13^5)+4500=9333.347237

AW for maxhine M2=20000*13%/(1-1/1.13^8)+6500=10667.73439

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