ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Use Rate of Return Method. Answer the given
problem below.
A company is going to buy a new machine for manufacturing its
product. Four different machines are available. Cost, operating and other
expenses are as follows. Money is worth 17% before taxes to the company.
Which machine should be chosen?
Machine A
Machine B
Machine C
Machine D
(FC)
P 24,000
P 30,000
P 49,600
P 52,000
(OC)'year
P 1,300
1,360
P 2,020
P
P
2,400
P 11,600
P 2,800
(LC)/year
P
9,320
P
4,200
P 2,000
(МC) year
1,900
1,300
700
(IT) уear
P
720
900
1,488
1,560
Life
5 years
5 years
5 years
5 years
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Transcribed Image Text:Use Rate of Return Method. Answer the given problem below. A company is going to buy a new machine for manufacturing its product. Four different machines are available. Cost, operating and other expenses are as follows. Money is worth 17% before taxes to the company. Which machine should be chosen? Machine A Machine B Machine C Machine D (FC) P 24,000 P 30,000 P 49,600 P 52,000 (OC)'year P 1,300 1,360 P 2,020 P P 2,400 P 11,600 P 2,800 (LC)/year P 9,320 P 4,200 P 2,000 (МC) year 1,900 1,300 700 (IT) уear P 720 900 1,488 1,560 Life 5 years 5 years 5 years 5 years
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