Part F. ABC Company needs to acquire a machine to be used in its manufacturing process. Two types of machines that would

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Part F Abc Company Needs To Acquire A Machine To Be Used In Its Manufacturing Process Two Types Of Machines That Would 1 (88.39 KiB) Viewed 15 times

Part F. ABC Company needs to acquire a machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (6 points) Machine A could be purchased for $48,000. It will last 10 years with annual maintenance costs of $1,500 per year. After 10 years the machine can be sold for $9,000. Machine B could be purchased for $41,000. It also will last 10 years and will require maintenance costs of $7,000 in year three and S7,000 in year six. After 10 years, the machine will have no salvage value Required: Assume an interest rate of 5% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine should ABC purchase? (6 pts) Instructions: Copy the table below and enter the present value of each machine in the appropriate box. Enter in the best option box the machine ABC should purchase Present value of Present value of 1 n Future value of an ordinary annuity 3.15250 6.80191 12.57789 an annuity due Present value of an ordinary annuity 2.72325 5.07569 7.72173 Future Value of 1 1.15763 1.34010 1.62889 i 3 0.86384 5% 6 0.74622 2.85941 5.32948 8.10782 5% 10 0.61391 5°
Instructions: Copy the table below and enter the present value of each machine in the appropriate box. Enter in the best option box the machine ABC should purchase. n Present value of 1 0.86384 Future value of an ordinary annuity 3.15250 6.80191 12.57789 Future Value of 1 1.15763 1.34010 1.62889 Present value of an ordinary annuity 2.72325 5.07569 7.72173 Present value of an annuity due 2.85941 5.32948 8.10782 i 3 5% 6 0.74622 5% 5% 10 0.61391 A B Best Option A For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI V S Paragraph Arial 14px v TK 465 a 5 三三三三 Imi fil 0