For a marr of 12 which one of the two mutually exclusive, Ask an Expert

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For a MARR of 12%, which one of the two mutually exclusive machines should be selected? The increase in costs and benefits trend does not change when a new machine is put into action (The cost keep rising at 3% every year and the benefits increase by 7% every year for the 12 year project life). Machine A Machine B Initial cost $650,000 $276,000 Life in years 12 6 Salvage after life 12% 18% Benefits per year $134,000 $114,000 Costs per year $12,900 $16,800 Inflation 3% Increase in benefits 7% Machine A. Machine B. Either machine will be fine. None of the machine are good enough.

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