The following annual costs are associated with three new extruder machines being considered for use na Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,500,000 $105,000 $199,000 $65,000 $16,000 X-TRUD 13 $2,620,000 $109,000 $614,000 $80,000 $14,500 O Choosing SUPR-X is best because it has the highest Annual Benefit SUPR-X O Choosing SUPR-X is best because it has the lowest M&O cost in vr1 7 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. $2,020,00 $117,000 $671,000 $56,000 $11,000 O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than X-TRUD. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than X-TRUD.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
The following annual costs are associated with three new extruder machines being considered for use
in a Styrofoam cup plant:
Data
Useful Life, Years
First Cost
Salvage Value
Annual Benefit
M&O
M&O Gradient
X
17
$2,500,000
$105,000
$199,000
$65,000
$16,000
X-TRUD
13
$2,620,000
$109,000
$614,000
$80,000
$14,500
O Choosing SUPR-X is best because it has the highest Annual Benefit
Choosing SUPR-X is best because it has the lowest M&O cost in yr1
SUPR-X
7
$2,020,000
$117,000
$671,000
$56,000
$11,000
The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose?
Use Annual Cash Flow Analysis and provide the right reason.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than
X-TRUD.
O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than
X-TRUD.
Transcribed Image Text:The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,500,000 $105,000 $199,000 $65,000 $16,000 X-TRUD 13 $2,620,000 $109,000 $614,000 $80,000 $14,500 O Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X is best because it has the lowest M&O cost in yr1 SUPR-X 7 $2,020,000 $117,000 $671,000 $56,000 $11,000 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than X-TRUD. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than X-TRUD.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Equivalent Uniform Annual Benefit and Cost
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education