The machines that have the following cost are under consideration for a new manufacturing process. Which is the best alternative using the IRR comparison of independent alternatives (compute the IRR for each alternative)?. The MARR is 5% semiannually.
Should I buy both, one or none if I have $125,000 to invest?
Machine A Machine B
First cost $52,000 $73,000
Semiannual operating cost 10,000 8,000
Semiannual income 15,000 20,000
Semiannual income gradient 100 100
Salvage Value 19,000 11,000
Life in year 4 4