Two flash vaporizer machines are considered for the upgrade of biodiesel production.
Information about the two machines is given below. MARR is 10% per year.
Machine A Machine B
Capital Investment $100 $120
Annual Revenue $50 $70
Useful Life (years) 3 2
Salvage value at the end of useful life $0 $10
The study period is 6 years. What assumption should be used? And, which machine should be selected based on the AW method ? Calculate down to at least two decimals at each step.