Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 12, Problem 7P
To determine

Calculate the expected annual cost.

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A company is planning to install a new automated plastic- molding press. Two different presses are available. Information for these two mutually exclusive alternatives are as follows: Press 1 Press 2 Investment cost $49,600 ??? Annual expenses $25,192 $22,880 Reject rate 2.6% 5.6% Both presses are capable of producing 120,000 units per year. Non-defective units are sold for $0.375/unit (rejected units are worthless); the selected analysis period is five years; and the MARR = 10%. Find the breakeven investment cost of Press 2.
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