32 The manager of a canned food processing plant is trying to decide between two labelling...

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32 The manager of a canned food processing plant is trying to decide between two labelling machines. Construct the incrementa

business accounting

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Answer 1

Answer #1

Since planning horizon is not specified,I will use LCM and the easier method for LCM is to use Equivalent uniform Annual worth

Machine A

EUAW=-15000(A/P,10,7)-1600+3000(A,F,10,7)

=-15000(.2054)-1600+3000(.1054)

=-4365

Machine B

EUAW=-25000(A/P,10,10)-400+6000(A,F,10,10)

=-25000(.1627)-400+6000(.0627)

=-4091

EUAWB<EUAWA choose B

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Answer 2

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