hree lathes П, 12, äre av the following information. Information is expressed in terms of cost. If the minimum absorption rate is assumed to be 8%, which lathe will you choose? T1 T2 T3 Initial cost Annual labor cost Annual maintenance costs Scrap value Useful life 10000 9000 12000 5000 500 5000 5500 300 850 400 1150 1000 6. 4 12

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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8.11)

8.11) Three lathes T1, T2, T3 are available with the
following information. Information is expressed in terms
of cost. If the minimum absorption rate is assumed to be
8%, which lathe will you choose?
T1
T2
T3
Initial cost
10000
9000
12000
Annual labor cost
Annual maintenance costs
Scrap value
Useful life
5000
5000
5500
500
300
400
1000
850
1150
6
4
12
Transcribed Image Text:8.11) Three lathes T1, T2, T3 are available with the following information. Information is expressed in terms of cost. If the minimum absorption rate is assumed to be 8%, which lathe will you choose? T1 T2 T3 Initial cost 10000 9000 12000 Annual labor cost Annual maintenance costs Scrap value Useful life 5000 5000 5500 500 300 400 1000 850 1150 6 4 12
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