An engineer must recommend one of two machines for


An engineer must recommend one of two machines for integration into an upgraded manufacturing line. She obtains estimates from two salespeople. Salesman A gives her the estimates in future (then-current) dollars, while saleswoman B provides the estimates in today's (constant-value) dollars. The company has a MARR of a real 15% per year, and it expects inflation to be 5% per year. Use PW analysis to determine which machine the engineer should recommend.

Salesman A (future $)                Saleswoman B (today's $)

-60,000                                       -95,000                                             first cost, $

-55,000                                       -35,000                                           AOC, $/year

10                                                 10                                                  life, years

Request for Solution File

Ask an Expert for Answer!!
Business Economics: An engineer must recommend one of two machines for
Reference No:- TGS01112721

Expected delivery within 24 Hours