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The Tom Thumb Railroad Company is considering new automated ticketing equipment, which has a life of 20 years. The Kick-Print ticket machine costs $50,000 and is expected to produce net savings of $14,000 the first year. Each year after the first, net savings will drop by $1000 until they reach $6000. These $6000 savings will continue for the machine's remaining life. The Tick-Stamp costs $54,000 and is expected to save $8000 per year. Based on discounted payback analysis and a MARR of 8%, which machine should be chosen? Does the EAC measure lead to the same decision?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92638019

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