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A dentist is deciding between two X-ray machines for his new office. Estimated

Question : A dentist is deciding between two X-ray machines for his new office. Estimated : 2141716

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

Answer the question.

10) A dentist is deciding between two X-ray machines for his new office. Estimated costs for each machine are the following:

Machine

A

B

Installed cost

$36,000

$38,000

Annual maintenance cost

$1250

$950

Market value at year 6

$5750

$6250

Life, years

6

6

Which machine should be recommended based on the annual worth method? Use a MARR of 15% and a study period of 6 years.

11) A major bakery-cafe chain is evaluating whether they should consolidate its two offices into one location when the two leases expire. In addition, the company also needs to decide if they want to purchase or lease the new location. The estimated costs for these three alternatives are as follows:

Alternative

 

Continue Leasing

Separate

Offices

Lease

Combined

Office

Purchase

Combined

Office

Initial costs

-

-

$270,000

Annual lease

$53,550

$63,000

-

Annual maintenance costs

-

-

$6000

Lease period

4

12

-

Market value at the end of

year 12

-

 

-

 

$216,000

 

Which alternative should be selected based on the annual worth method? Use a MARR of 11% and a study period of 12 year(s).

12) A manufacturing firm is considering two models of lathes. Model A will have an initial cost of $29,000, an operating cost of $2750, and a salvage value of $6500 after 6 years. Model B will have an initial cost of $36,500, an operating cost of $2200, and a $ 7750 resale value after 12 years. At an interest rate of 10% per year, which model should the consulting firm buy?

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