Bruno\'s, Inc. is analyzing two machines to determine which one it should purcha

Question

Bruno's, Inc. is analyzing two machines to determine which one it should purchase. The company
requires a 14% rate of return and uses straight-line depreciation to a zero book value. Machine A has
a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000,
has annual operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be
replaced at the end of its useful life. Which machine should Bruno's purchase and why? (Round your
answer to whole dollars.)
A. Machine A; because it will save the company about $8,600 a year
B. Machine A; because it will save the company about $132,912 a year
C. Machine B; because it will save the company about $200,000 a year
D. Machine B; because it will save the company about $11,600 a year
E. Machine B; because its equivalent annual cost is $199,759

please show me the steps

Explanation / Answer

Option

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

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